Nexo is a crypto lending platform that lets you earn interest on your crypto.
Nexo was started in 2017 by Antoni Trenchev, Georgi Shulev, and Kosta Kantchev, who had prior experience with several financial institutions across Europe.
Nexo is Credissimo’s subsidiary. Credissimo is a leading fin-tech company across Europe, started in 2007. They have the largest network in the space of crypto and is the most advanced instant crypto loan provider. Credissimo always operated under the stringent regulations and strict supervision by many European Banking and Financial Services Regulators. This connection has been removed from Nexo’s whitepaper, the reason remains unclear.
Nexo: Company Profile
Website: Nexo
Web or app based: It is available on both platforms
Started in: 2017
Founders: Antoni Trenchev, Georgi Shulev, and Kosta Kantchev
What is Nexo?
Nexo is a cryptocurrency lending platform which also allows users to earn interest on their crypto earnings. It is an overdraft based blockchain system and provides users, access to crypto-backed loans. They aim to replace services provided by traditional banks, with crypto as the asset.
It is currently not a crypto trading platform, but users can opt to open a Nexo savings crypto account which offers a high-yielding method to earn on investments and fiat that remain idle.
Nexo manages assets for over 1.5 million users stretched across 200 jurisdictions, supporting 40+ fiat currencies Nexo’s mission involves transforming digital finance through blockchain technology and seek to be the financial services of tomorrow. The company’s values stems from inclusivity, transparency and efficiency which is reflected through their completely automated products on a global scale.
NEXO tokens: What are Nexo Tokens?
NEXO tokens are the native tokens of the lending platform. Nexo shares 30% from its net profit with loyal users through dividends. Nexo claims that the tokens are the world’s first ever dividend-paying asset-backed coins. The platform has paid its users over $9 million as dividend in the past three years. Nexo tokens are an ERC-20 token.
The coin provides several benefits to the users:
- Users can earn 12% APR for stablecoins, EUR, GBP and USD deposits.
- Users can earn 8% APR for Bitcoin (BTC) , Ethereum (ETH), XRP, Bitcoin Cash (BCH), LiteCoin (LTC), Binance Coin (BNB), EOS, Chainlink (LINK), XLM, TRON (TRX) and Paxos Gold (PAXG).
- Users are allowed to borrow 5.9% APR for Nexo’s Instant Crypto Credit Lines.
- Users can benefit from Nexo’s net profit in the form of dividends.
Nexo Account Creation: How to create your account on Nexo?
Users can create an account through the website or mobile app. A Know Your Customer (KYC) and Anti-Money Laundering (AML) process must be complete for the verification of the account. The verification of the ID is completely automated and hence, can be completed in a few minutes. The personal details asked for will include is basic such as name, address and a Government recognized form of ID, for example: Passport or Drivers licence.
Nexo Fees: How much fees do you pay?
Nexo does not charge its users any account maintenance fees. It also offers free withdrawals according to the loyalty tier the user belongs to which is discussed below.
The platform covers any transaction fees and charges brokerage fees when the customer transfers money from an exchange wallet to their Nexo account. This depends on the broker the user wishes to use.
There is no minimum amount which needs to be deposited in the user’s account. However, there are minimum withdrawal for cryptocurrencies which varies depending on the crypto.
Nexo’s offerings: What are the services offered by Nexo app?
Earn interest on crypto assets: How much interest do Nexo pay?
Nexo users can earn interest on regular crypto as well as stablecoins. The platform offers up to 8% interest on regular cryptocurrencies such as Bitcoin, Ethereum and up to 12% interest on stablecoins. The compounded interest on these holdings are paid out daily to users. There is no minimum amount for withdrawal, money can be withdrawn or added to the account anytime. There is no lock up period either.
Fiat currency can be withdrawn any time but crypto has some restrictions. The limits for withdrawals is dependent on the loyalty tiers users belong to, ranging from 1 to 5 withdrawals per month. It is a four tier system consisting of base, silver, gold and platinum and provides special benefits depending on the amount of NEXO tokens the user holds in their Portfolio Balance. Portfolio Balance is the combination of the users credit line and savings wallet.
The requirements and benefits of each tier are:
- Base : Zero NEXO tokens are needed to be part of this tier. Users from this tier are provided with 1 free withdrawal per month.
- Silver : Users holding 1%-5% of their portfolio in the form of NEXO tokens . Users from this tier are provided with up to 2 free withdrawals per month.
- Gold : Users holding 5%-10% of their portfolio in the form of NEXO tokens . Users from this tier are provided with up to 3 free withdrawals per month.
- Platinum : Users holding at least 10% and over, of their portfolio in the form of NEXO tokens . Users from this tier are provided with up to 5 free withdrawals per month.
Percentage applicable to one-month term deposits:
Percentage applicable to three-month term deposits:
The loyalty program was created by Nexo to provide its users flexibility, dynamics, accessibility and usability by choosing the loyalty tier they wish to be part of.
Nexo offers a crypto savings account for cryptocurrencies as well as fiat currency (EUR, USD, GBP & more) which yields high interest. The users funds are backed by an insurance policy.
The earnings differ for crypto and fiat. There are 11 cryptocurrencies (BTC, ETH, XRP, BCH, LTC, BNB, EOS, LINK, XLM, TRX & PAXG), 6 stablecoins (USDT, USDC, PAX, TUSD, DAI, HUSD), and 3 fiats (USD, EUR, GBP) that are accepted as deposits totally. Nexo currently offers 12% APR on the three fiat currencies.
Funds can be deposited by the user through direct bank transfer or transfer from a crypto wallet/exchange. Bank transfers might take up to 3 business days.
Borrowing & loans on Crypto: How to borrow Cash and Stables?
Nexo allows users to take out loans in the form of fiat or crypto without any credit checks. The rate of interest on the loans start from 5.9%. Borrowing from Nexo ensures no need for the user to sell their crypto assets or investments.
The amount borrowed by the user is known as credit line. Users can borrow from $50 to $2 million. The amount the user is eligible to borrow, may depend on the amount of crypto deposited. For example, Ethereum, your credit line will be 50% of the ETH deposited and will fluctuate based on ETH’s market value. If the value of the crypto deposited is falling, the user will receive an email from Nexo stating the drop in the value, urging them to deposit more crypto maintain the collateral for the loan.
Some of the cryptocurrencies that serve as collateral on Nexo are: Bitcoin (BTC), Ether (ETH), XRP, Litecoin (LTC), NEXO Tokens, Binance Coin (BNB), Stellar Lumens (XML) and EOS (EOS)
The borrowed amount can be spent through fiat currency, crypto or by using the Nexo card. Borrowing through crypto-backed loans is a non-taxable event as no crypto is sold at a profit to attain the loan.
The Loan-To-Value (LTV) ranges from 20% to 50% of the crypto assets deposited. Lending in Nexo also allows users to deposit multiple assets, the LTV ratio can be customized to the deposits.
NEXO card: Get 2 percent Cashback Rewards
Nexo collateralized the crypto held by users, converting them instantly into loans with every purchase the user makes with the card. The Nexo card can be used only with merchants who allow Mastercard.
It is similar to a credit card issued by the bank. The only difference is that Nexo does not check the users credit history, instead Nexo checks the collateralized holdings which the user has staked to avail loans.
Nexo offers 2% cashback or crypto-back paid in Bitcoin or NEXO tokens immediately on every purchase. It may be used worldwide but has its limitations as Mastercard is not as popular as VISA cards.
NEXO Exchange: Buy and Sell Crypto against Fiat
The exchange provided by NEXO allows users to swap between fiat airs and 75+ digital assets. The exchange serves as a broker that connects the user simultaneously to 5+ crypto exchanges.
NEXO Mobile App
The mobile app has similar functions to the web version of Nexo which allows users to manage their NEXO card, credit line as well as crypto assets.
The mobile app provides users with card management services such as enabling notifications for processed transactions, changing the card’s PIN and more.
NEXO utilizes military-grade, 256-bit encryption and 24/7 fraud monitoring services to provide the highest safety level for the user’s mobile investments and transactions, this is in addition to the 2-factor authentication feature adopted by Nexo. Users can also employ facial recognition to their mobile wallet.
Management of interest earnings and crypto investments can be handled and monitored through the app.
The app is available for Android and iOS devices.
NEXO Insurance: Are my funds insured by Nexo?
All the cryptocurrencies are stored in the Ledger Vault. Private keys are entrusted to the Ledger Vault which are held in bank-grade cold storage, multi-signature storage custody.
Nexo claims that their insurance portfolio is $375 million currently. They have plans in place for 2021 to insure more than $1 billion in 2021 with a group of trusted insurers.
This insurance policy is easily the most impressive when compared to other crypto borrowing and lending platforms.
Is NEXO a Safe Platform to Earn Interest on Crypto?
NEXO strictly follows global KYC and AML standards with regulations. NEXO utilizes various safeguards to secure the platform which consists of:
- Extensive Firewall Server Architecture
- Bio-metrical Identity Verification
- Segregated Multi-Signature Cold Wallets
- Storage of funds in bank-grade Class III vaults via Ledger Vault
- 2 factor Authentication
- Facial recognition
Nexo also provides support service 24/7 with login alerts, withdrawal confirmations, notifications ensuring that the user is in charge of their account and its security.
NEXO is licensed and regulated by the EU. It has also attained several registrations and licences across jurisdictions to authenticate themselves as a safe financial institution globally.
Nexo’s security infrastructure is ISO/IEC 27001:2013 certified, it is safe to assume that Nexo is as secure as its competitors such as BlockFi and Celsius.
Disadvantages of Nexo
- Nexo supports only selected cryptocurrencies
- Lender interest rates are higher than borrower rates, in some cases.
- Nexo urges users to hold NEXO tokens to make the best out of the platform through best loan as well as savings rates.
- It has lesser educational resources when compare to its competitors.
- Not so responsive customer service.
- The platform is not clear about what the users must do for additional withdrawals.
Risks of Using Nexo Platform
- Loss of interest rate while lending in case of a bearish market.
- Limitations and issues with withdrawals, as Nexo has the custody of the users accounts.
- Hacking or leak of information due to the custody of accounts.
- The funds or deposits of the users may be held by the platform as and when they wish.
Earn in Kind vs Earn in Nexo
Earn in Kind means for the token you deposit, you earn interest in the same token. For example: If you have deposited 10000 USD, @12 percent per annum, you would make 2000 USD as interest, that’s paid out daily.
Earn in Nexo means, the reward will be paid in Nexo tokens. If you choose to get paid in Nexo tokens, you would get additional 2 percent interest.
Out of both, I would prefer getting rewarded in Nexo tokens. After getting the rewards in Nexo, if you want, you can change it to any token.
How to earn maximum interest on Nexo?
To earn maximum interest in Nexo platform, you need to buy atleast 10 percent of the Nexo tokens and be in PLATINUM tier. You also will need to be taking the rewards in Nexo tokens. This ensures maximum interest from Nexo platform.
How to get started with Nexo?
Getting started with Nexo takes less than a minute. Signup on the Platform. Complete your KYC. Once verified, transfer funds to your Nexo account. That’s it. Once done, you will be paid interested daily.
My Final Thoughts on Nex0 platform?
Nexo does have a strong presence as a crypto lending platform. It is regulated up to a certain extent , thus many users deem it trustworthy.
The platform is not aimed at crypto traders, it is more suitable for intermediate users who are seeking a long-term investment. The interest rates offered by the platform are definitely competitive and the daily pay outs are an added bonus. People might find the platform more comfortable than companies regulated by the US.
It is definitely worth a try.
Frequently Asked Questions (FAQ)
How does Nexo earn money?
Nexo benefits from the differential between crypto loans and deposits.
Is Nexo DeFi?
No, it is not. Nexo is a centralized platform that can retain users deposits and can limit withdrawals.
Is there a sign-up bonus?
No. Unlike its competitors, Nexo does not offer any sign-up bonus.
What are the alternatives to Nexo?
BlockFi and Celsius are some noteworthy alternatives.
How to reach Nexo’s customer support?
Nexo can be contacted through email : [email protected]. They can also be contacted through online messaging and live chat 24/7.
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