NEXO crypto was a highly anticipated project back in April 2018 when it raised over $52 million in the Public Pre-sale round. NEXO was also one of the early projects to adopt Blockchain technology in the financial sector.
Today, AZCoin will explore this project in detail with you, as well as the investment opportunities in NEXO crypto!
What is Nexo crypto?
Nexo is a leading platform for crypto lending and financial services with over 6 million users across 200 jurisdictions and has processed over $150 billion in the past five years. The goal of this service is to provide a better financial system in the digital asset world by offering instant crypto-backed loans without relying on credit scores.
The company was founded in 2017 by Antoni Trenchev, Georgi Shulev (whose contract was terminated in 2019), Kosta Kanchev, and Kalin Metodiev.
With a Nexo crypto account, you can instantly borrow using over 30 fiat currencies or USDT or USDC, in addition to buying, selling, and exchanging various major cryptocurrencies to grow your investment portfolio.
The platform also allows crypto owners to leverage the value of idle savings by earning high interest rates in the form of passive income through staking.
How does Nexo work?
Nexo serves as an all-in-one solution for all your crypto needs. Whether it’s crypto loans, credit cards, or buying and selling crypto, the Nexo platform has got you covered.
Nexo offers credit to users who deposit supported cryptocurrencies into their Nexo Wallet. The platform accepts over 60 digital assets, including popular options like Bitcoin, Ethereum, Polygon, and Ripple. Holding Ethereum and Chainlink (LINK) in your Nexo account can earn you interest rates of up to 8% per year.
You can also exchange these tokens for other assets that offer higher yields, potentially reaching up to 17% per year.
You can also earn money by exchanging crypto. For each exchange transaction, you can earn up to 0.5% in crypto rewards paid in the exchanged currency. You can also use your crypto assets as collateral to borrow fiat money or stablecoins almost instantly at 0% APR. The borrowing limit is based on the value of the assets held in your account. Since the lending system is automated, you can access additional credit as your assets increase in value.
Furthermore, Nexo has a cross-chain bridge to facilitate faster transactions with lower fees. Initially dedicated to bridging Ethereum-Polygon for MATIC tokens, this bridge has expanded to include other ERC-20 tokens like LINK, AAVE, and SUSHI, as well as stablecoins such as USDT, USDC, and DAI. With Nexo’s cross-chain bridge, users can manage their assets in the Nexo Wallet, saving time and money in the long run.
Products that Nexo is providing
Nexo is known for its cryptocurrency lending services, but it actually offers a wide range of services to cater to diverse user needs. Here’s a breakdown of what Nexo provides:
Lending
If you plan to hold your crypto long-term, you can consider depositing them on Nexo to earn interest. Nexo users have two options for earning passive income from their crypto: either earn interest in the same cryptocurrency or earn higher annual interest paid in NEXO tokens.
The APY (Annual Percentage Yield) depends on the user’s loyalty level and the chosen asset. Nexo treats customers with a few hundred USD in assets the same as those with millions. Loyalty is determined by the percentage of NEXO tokens in a user’s portfolio, not the amount deposited. Higher loyalty levels result in higher APYs, with four tiers: Platinum, Gold, Silver, and Base, from highest to lowest.
Borrowing
This feature allows users to lock their crypto as collateral in exchange for fiat currency or stablecoins. The funds are deposited directly into a bank account or debit card. There are some limitations on borrowing, such as a minimum loan amount of $50 for stablecoins or $500 for fiat currency, and a daily maximum loan limit of $2 million.
Nexo’s borrowing interest rates can be 0% for Platinum users with an LTV (Loan-to-Value) ratio below 20%, or up to 13.9% for Base users with a higher LTV. Other notable points include:
- Loans up to 90% LTV, with more volatile assets having lower LTVs
- No prepayment fees
- No fixed repayment schedule
- Higher loyalty levels receive lower borrowing interest rates
Exchange
Users can trade over 300 cryptocurrencies with a 0.5% cashback depending on their loyalty level. Nexo’s order matching mechanism connects with the order books of 10 top exchanges simultaneously to ensure users get the best prices and instant order execution.
Nexo Booster
This feature acts as leverage, allowing customers to borrow additional funds to buy crypto with a maximum limit of three times their existing assets. Naturally, users need to have crypto assets as collateral to use this feature.
Buying Crypto on Nexo
Nexo offers over 38 cryptocurrencies that users can purchase using debit/credit cards or bank accounts. After purchasing, the crypto is automatically added to the interest-earning assets without any action required from the customer.
Nexo Card
The Nexo Card is a collaboration between Nexo and Mastercard, allowing you to pay with crypto at any Mastercard-accepting merchant worldwide. The card balance earns interest like deposits on the platform (up to over 10%), can even offer cashback on large transactions, and has no annual fees.
NEXO Token Overview
NEXO is a security token, meaning it complies with regulations set by the US Securities and Exchange Commission (SEC), the European Banking and Financial Services Authority (EBFS), and other regulatory bodies.
Purpose
- Dividend Payments: NEXO holders receive 30% of Nexo’s profits as dividends, paid monthly in ETH. These dividends are distributed to NEXO holders and are backed by the underlying assets in Nexo’s lending portfolio.
- Interest Rate Reduction: NEXO holders receive a discount on interest rates when they pay interest on their loans using NEXO.
- Increased Loan Limits: Similar to other cryptocurrencies, NEXO can be used as collateral for loans, allowing for larger loan limits and better interest rates.
- Governance: NEXO holders have voting rights on certain key decisions proposed by the project development team.
Key Features
- Token Name: NEXO
- Ticker: NEXO
- Blockchain: Ethereum
- Token Standard: ERC-20
- Contract Address: 0xb62132e35a6c13ee1ee0f84dc5d40bad8d815206
- Token Type: Security – Utility
- Total Supply: 1,000,000,000 NEXO
- Circulating Supply: 560,000,011 NEXO (as of January 21, 2024)
Tokenomics
NEXO’s tokenomics are highly centralized, with a majority (52.5%) allocated to investors, 11.25% to founders and developers, 25% to an overdraft reserve fund, and 5.25% to advisors. Only 6% is allocated to community airdrops.
While NEXO is marketed as a decentralized project, the reality is that the development team retains full control. Holding a large amount of NEXO doesn’t grant voting rights or governance power. The primary benefit is preferential treatment when using the platform.
The factors that contribute to the value of the NEXO crypto
Nexo’s continued growth and increasing value of the NEXO token are driven by several factors:
Market Leadership in Crypto Lending
The collapse of centralized crypto lending platforms like BlockFi and Celsius has eliminated two major competitors for Nexo. Currently, no other centralized crypto lending platform seems to match Nexo’s level of user trust. While decentralized platforms like Curve and AAVE exist, many users prefer the ease of use offered by centralized platforms like Nexo. This suggests that Nexo is well-positioned for long-term success.
Strong Financial Foundation
During Celsius’s bankruptcy, Nexo was one of the companies in talks to acquire its rival. Furthermore, Nexo has consistently demonstrated its robust financial position in 2022 and 2023 by announcing buyback programs for its NEXO token using revenue generated from its business operations. This move aims to increase liquidity and value for the token in the market.
To evaluate and select a reputable trading platform, please refer to the Evaluation Process page.
Conclusion
Nexo crypto currently stands out as a leading platform for cryptocurrency lending. Users can leverage it to generate passive income or borrow stablecoins/fiat currency against their cryptocurrency holdings. Choosing a reliable cryptocurrency exchange is crucial for trading. To find the best options, consult the best crypto exchanges 2024.
I am Tony Vu, living in California, USA. I am currently the co-founder of AZCoin company, with many years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
Email: [email protected]
