Visit: Nexo

Nexo is a centralized lending institution that has operated in the digital currency space since 2018. On its main website, the company states that it is currently licensed and regulated as a financial institution in the EU. Nexo enables it’s users to unlock the value of their cryptocurrency holdings without having to sell and has grown to over 1 million users in its two years of operation.

Their core business line can be described as instant crypto-backed loans and crypto interest accounts. Only users that have undergone a standard KYC/AML process and deposited cryptocurrency into their Nexo account can utilize their credit line. Similarly, for the interest accounts those with Ethereum, Bitcoin, USDC, or any of the other crypto assets supported by Nexo can access competitive interest rates by depositing their crypto into their Nexo account.

Beyond convenient crypto-backed loans and interest accounts, Nexo issues a credit card for users in select jurisdictions and their own native token which gives holders certain perks when using Nexo products.

Nexo Interest Rates 2021

a
a
-2% -2%
BCH
BCH
6% 6%
BNB
BNB
6% 6%
BTC
BTC
6% 6%
DAI
DAI
10% 10%
EOS
EOS
6% 6%
ETH
ETH
6% 6%
G
G
-2% -2%
LINK
LINK
6% 6%
LTC
LTC
6% 6%
NEXO
NEXO
-2% -2%
PAX
PAX
10% 10%
PAXG
PAXG
6% 6%
S
S
-2% -2%
TRX
TRX
6% 6%
TUSD
TUSD
10% 10%
USDC
USDC
10% 10%
USDT
USDT
10% 10%
XLM
XLM
6% 6%
XRP
XRP
6% 6%

Start Lending at Nexo.com

History/Background

The Nexo Group has various legal entities around the world to ensure that it can operate in the 200+ jurisdictions the company has customers in. According to Crunchbase, the company raised $52.2mm of funding back in 2018.

Originally, Nexo started off as a spin-off of European Fintech app, Credissimo.

Nexo Earn

Nexo enables users to deposit stablecoins and other cryptocurrencies to earn a return on their deposits. All interest payments are made on a daily basis and users can withdraw their deposited assets at any time. You can earn up to 12% on stablecoins and 8% on other tokens supported by Nexo at the time of writing.

Each individual user’s interest rate is determined by their Nexo Loyalty Tier and the type of interest payout. With this model, users are able to generate higher interest rates on deposits based on having a minimum allocation of NEXO tokens in their portfolio. Additionally, by accepting their interest payout in NEXO, users can get an additional +2% bonus on top of their boosts from the loyalty tier.

Nexo Loyalty Rates by Tier

Nexo Loans

By utilizing Nexo’s crypto banking services, users can put up their crypto assets as collateral and take out instant fiat loans. Their credit lines will also dynamically adjust based on the fluctuation in market prices of their crypto collateral.

With dynamic credit-lines offered by Nexo, loans can be backed by a basket of accepted cryptocurrencies, enabling users to utilize their holdings as efficiently as possible. Loans can be paid back with fiat currency via bank wire or with cryptocurrency.

 

 

Supported Tokens on Nexo

Nexo currently accepts cryptocurrencies like Bitcoin, Ethereum, Litecoin, Stellar, EOS, and others as forms of collateral on their platform. Once users have deposited their collateral, they can instantly access the value of their crypto holdings by taking out a loan in their fiat currency of choice.

The full list of cryptocurrencies you can earn interest on with Nexo is as follows: BTC, ETH, LTC, XRP, EOS, XLM, BCH, USDT, USDC, TUSD, DAI, PAX, HUSD, LINK, TRX, PAX Gold, and BNB.

Nexo Token

Nexo features an ERC20 company token called NEXO. Тhe NEXO Token claims to be the world’s first complaint, dividend-paying, asset-backed token. Nexo shares 30% of its profits with token holders in the form of dividends.

The company regularly updates the incentives that encourage token holders to hold their NEXO tokens. Currently, NEXO holders receive benefits both on the borrowing side in the form of lower interest rates on their credit line and on the lending side with the higher APYs reserved for NEXO token holders.

The team has hinted that the token will also unlock additional incentives for both Nexo card users and members of the future affiliate program.

More on the Nexo ecosystem and the utility of the token can be found in the whitepaper.

Safety & Insurance

While Nexo has operated mostly without any major issues, users should still be wary and do ample research before depositing significant funds onto the platform. The company is not regulated in the United States. While Nexo states on their website that they have a European Financial Institution Licence, they make no reference to which country the license was acquired in.

Nexo has partnered with Bitgo to offer secure storage and $100mm insurance for custodial assets. The $100mm insurance policy is offered through Bitgo’s arrangement with Lloyds of London. While this policy is worth noting, readers should understand that it is not all-encompassing.

More recently, Nexo has also formed a partnership with Ledger to diversify their custody infrastructure. The partnership utilizes Ledger Vaults, which insures assets for up to $150mm. At the time of writing, Nexo’s insurance portfolio adds up to a total of $375mm of coverage, with a long-term plan of insuring up to $1 billion.

The insurance is cumulative over all BitGo clients and applies only for the assets kept in the BitGo cold wallets.

Before using Nexo, you should be aware of the custody risks involved. Since Nexo is a centralized custody platform, when you deposit funds onto your Nexo account you no longer “own” your crypto assets.

In contrast, when you hold your funds in self-custody wallets like Metamask or Argent, you do retain ultimate ownership of your cryptocurrency.

Use-Cases

Retail crypto investors can unlock the fiat value of their crypto by taking on a tax-efficient loan with Nexo.

Cryptocurrency miners are another subset of Nexo users that utilize the dynamic credit lines to cover capital costs without having to liquidate their mining rewards. Realistically, any individual or entity holding significant amounts of cryptocurrency could find value in Nexo’s services.

 

 

More can be found in Nexo’s official Business Overview. 

Competitors

Nexo competes with other companies that offer crypto banking services such as BlockFi, Crypto.com, and Blockchain.com.

The rates provided by Nexo are competitive with the rest of the market and can significantly increase if you hold the Nexo token. Compared to some of its competitors mentioned above, Nexo offers more flexibility to users with daily payouts and timely withdraws. However, there does seem to be some legal uncertainty when dealing with Nexo as they are not entirely transparent with exactly where they are operating out of.

Keep up with Nexo by following them on Twitter.