What is Nexo (NEXO)? Read This Article To Its Conclusion To Get Nexo (NEXO) Explained

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Blockchaingalaxy

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I. What is Nexo (NEXO)?

NEXO is the world’s biggest and greatest crypto lender operating in the centralized finance scene, or CeFi, which has its own headquarter in Switzerland. Since 2018 Nexo has brought professional financial services to the world of digital assets.

Leveraging the best of the team's years of experience in FinTech along with the power of blockchain technology, Nexo empowers millions of people to harness the value behind their crypto assets, shaping a new, better financial system.

NEXO made a quick and powerful name for itself by offering instant crypto loans, which provides fast, immediate access to cash and support for maintaining ownership of one’s digital assets, with no reliance on credit score checkups.

CeFi operates separately and apart from the DeFi sphere due to the bridge between the worlds of traditional lending and blockchain. Nexo currently manages assets for 4М+ users across 200 jurisdictions.

Nexo values all of their customers greatly which is why they devised the NEXO Token, the world’s first compliant, interest-bearing token. The NEXO token is a US-SEC compliant, dividend-paying, security-currency which is backed by the assets in Nexo’s loan portfolio. Nexo’s customers have access to instant cash from around the world.​

II. Where Can You Buy Nexo (NEXO)?

The NEXO token can be bought on several popular several exchange platforms, such as:​
  • IDEX– trading pair: NEXO/ETH;​
  • DDEX– trading pair: NEXO/ETH;​
  • Hotbit– trading pairs: NEXO/BTC NEXO/ETH;​
  • EtherDelta– trading pair NEXO/ETH;​
  • Stocks.exchange –trading pair: NEXO/BTC;​

Nexo Wallets – What is the best Nexo Wallet

The NEXO coin is an ERC20 based token, so it can be stored in any Ethereum compatible wallet. But to use the Nexo platform and loan system, you have to download the Nexo Wallet and store your other cryptos in it.

III. What Does the NEXO Token Do?

NEXO was created during the ICO, and distributed to the team and early adopters. The firm shares up to 30% of its profits with NEXO holders.

The NEXO token underpins the loan and deposit ecosystem; holding the token entitles buyers to a 30% share of company profits, like a dividend. Nexo claims that it has paid over $9 million to token holders since 2018.

The token also has a few benefits for cryptocurrency interest account customers. If holding NEXO, users can:​
  • Earn an additional 2% APY on their deposits, bringing stablecoins up to 12% and other cryptocurrencies to 8%.​
  • Borrow 5.9% for Nexo’s Instant Crypto Credit Lines.​

Nexo token functionality.

IV. How Does Nexo (NEXO) Work?

In summary, Nexo’s business model uses an “under-leveraging” strategy to protect both the company and its customers. The Nexo platform allows clients to borrow a set percentage of the value of their crypto, protecting clients from the daily fluctuations of crypto prices, allowing their loan-to-value ratio to remain intact.

This ensures that the client is less likely to lose their crypto and ensures Nexo is protected should a customer default on their loan.

Adding to the success of the model is the real-time tracking provided by Nexo Oracle, tracking the changes in a cryptocurrency’s price in real-time, drawing data from several sources to prevent any price discrepancies when granting a loan to their users.

1 - Nexo Oracle

For starters, a client will need to transfer their crypto assets into their secure Nexo Account to begin using the Instant Crypto Credit Lines.

The Nexo Oracle will then automatically calculate the available amount for the credit line (based on real-time data on a cryptocurrency’s price) and set up the loan based on that data once the relevant blockchain confirmations for the collateral assets are received.

Blockchain oracles are third-party services that provide smart contracts with external information, serving as bridges between blockchains and the outside world.

The loan limit is based on the market value of the crypto assets which are pledged by the client as collateral. Unique to NEXO’s platform is the dynamic nature of the credit line: the Nexo Oracle increases the loan limit in the event a client’s assets appreciate in value. Additionally, users may utilize a variety of cryptocurrencies to back their loans, leaving them less vulnerable to market fluctuations and volatility.

All custodial assets are then placed in the Nexo Wallet, which are in turn held in cold storage in Class III bank-grade vaults with the SOC 2 Type 2 certified leading crypto custodian BitGo.​

2 - Receipt of Funds

Once the transaction begins, the client instantly receives their loan in one of 40+ fiat currencies via bank transfer or the free NEXO card. Upon receipt, the client is then able to withdraw part or all of their loan, anytime in a single transaction or multiple smaller withdrawals, accruing interest only on what they actually spend.​

3 - Repayment of the Loan

Nexo also offers a number of operations for repaying the loan, including a bank transfer in fiat currency or with cryptocurrency. The Nexo Oracle records the transaction on the blockchain and instantly updates the loan limits once repayment is received.

When a user has enough NEXO Tokens staked in their account to cover their accrued loan interest, Nexo provides a discount of 50% on the total amount. However, the user must have staked those NEXO Tokens in their Nexo Account for the entire duration of their loan to receive the full discount.

Nexo is very different from other traditional loan programs. It doesn’t require monthly repayments so long as the outstanding balance is within the available loan limit. Once the loan is fully repaid, the client can then withdraw their crypto assets from their Nexo Wallet or start a new credit line against that same collateral.​

V. Is Nexo (NEXO) Token a Good Investment?

NEXO’s total supply is pegged to 1 billion tokens; currently, 560 million are in circulation. The token price bounced around $0.09 and $0.50 for the first three years of its existence but exploded to $3.60+ in 2021.

This Nexo review won’t provide investment advice, but it’s worth considering the volatility of the token compared to the longevity of the company. The NEXO token launched right after the 2017 bull market, but saw its sharpest gain in 2021, alongside the 2021 bull run.

Whether or not NEXO is a good buy may come down to whether or not you plan to hold the token to receive company profits or increase your APY in the interest account– outside of pure speculation, of course.

Nexo token perks

VI. Closing thoughts

Considering that Nexo (NEXO) is offering an instant lending platform which follows the compliance standards in the crypto world, it would not be surprising to see this service attracting a great number of users and investors.

If you have any questions, ideas or problems, please leave a comment below. The cryptocurrency market is quite risky, please consider carefully before your investment decisions.​
 

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