NEXO is a crypto and FIAT lending/borrowing platform, like BlockFi or Celsius, but with some particularities that make them stand out. Since 2018, they've been working to shape the future of personal finance and the lending market, giving more power to the users.
Like other lending platforms, they let you borrow stablecoins or FIAT (in more than 40 currencies!) against a crypto or FIAT collateral, with very competitive rates (from 5.9% to 11.9%). As soon as you deposit funds in your account, a credit line opens that is instantly usable.
But you don't have to borrow money, I, for one, only use NEXO as a savings account for my crypto. You can earn from 5% to 12% interest on your crypto (11 cryptos, 6 stablecoins) and FIAT (USD, EUR and GBP) assets, depending on several parameters. And these interests are paid daily, making your portfolio grow more everyday!
They also recently introduced the NEXO exchange in their app, allowing you to exchange your cryptos instantly and with no surprises, meaning the price you see in the preview is the one you'll get once the exchange is done.
Using the NEXO card (for which you have to join a waiting list at the moment), you will also be able to easily spend your credit line, receiving cash back on all purchases, paying in local currencies, with no minimum monthly repayment, and all of that with zero fees.
Insurance wise, they just announced that they partnered with LEDGER Vault to raise their insurance portfolio, bringing it up to $375M. And they plan to have $1B in insurance by the end of the year.
So, all of this is pretty sweet, but you're probably thinking that you know lots of other platforms offering similar benefits... Well, what sets them apart from the competition is the NEXO token and what they labeled "Nexonomics".
The NEXO Token
The NEXO token is an ERC20 utility token introduced in 2018 when NEXO was born. It has surged more than 700% in a year, going from barely $0.10 to almost $2 today. It was created to encourage and reward loyalty and offer great perks and advantages to holders.
The users are divided in different Loyalty Levels, based on the proportion of NEXO tokens held in regards to the users' entire portfolio value:
- Base: with up to 1% of the portfolio value in NEXO tokens
- Silver: 1% - 5%
- Gold: 5% - 10%
- Platinum: 10% and more
Here are the original uses of the token:
- Dividends: NEXO invests 70% of its profits back in the company and distributes the other 30% once a year as dividends to token holders. As a token holder, you will earn dividends in two ways: Base Dividend - simply based on how many tokens you have, and Loyalty Dividend - based on how long you've had your tokens for. This means that every user, regardless of the Loyalty Level, can receive dividends. So far, over the last 3 years, they have distributed almost $10M to users in dividends.
- Lower borrowing interest rates: The more tokens you have, the lower the interest rate. It goes from 11.9% for a Base user to only 5.9% for Platinum users.
- Higher lending interest rates: As borrowing rates go down, lending rates go up, and this increase actually comes in two different forms:
- Based on your loyalty level, you can earn up to 1% higher interest on your crypto and 2% on your FIAT and stablecoin.
- If you choose to earn interests in NEXO tokens (regardless of the loyalty level), then you can earn an extra 2% on top of these, bringing the totals to 8% on crypto and 12% on FIAT/stablecoins.
I just want to add two things here. First, you can choose to earn in NEXO tokens even if you do not have any, so it's a great way to climb the loyalty ladder without actually investing. And second, earning in NEXO means a higher return but it is an APR, as the interests earned in NEXO are not compounded. Choosing to earn in asset, like BTC, DAI or Euros will give you a lower interest rate but it is an APY, meaning your interests will be compounded and your assets will grow everyday. The choice is yours. I would suggest earning in NEXO until you reach the loyalty level you want, and then when you're comfortable with the amount earned, going back to earning in kind, but this is my own personal view. Also, please note that there is no interest earned on the amount of NEXO token held, only dividends.
Nexonomics 2.0
As part of this new strategy, NEXO has made big moves in the recent months, such as the addition of BNB and XRP to their list of supported coins, a higher Loan-to-Value ratio, or an extensive Buyback Program, which I will leave out for now. Let's keep focusing on the advantages offered by the NEXO token in this new environment, as NEXO keeps unfolding new features of their Nexonomics strategy:
- Free crypto withdrawals: NEXO has a zero fee policy on most operations, which is a big plus, and this comes with free crypto withdrawals every month. This was just introduced last weekend, and goes as follows: based on your loyalty level, you can make from 1 (Base) to 15 (Platinum) free crypto withdrawals per month. No reason to be scared of transaction fees anymore (I'm looking at you ETH)!
- Voting - COMING SOON: NEXO token holders are like company shareholders, and as such they will get a right to vote for the direction NEXO will move toward. Soon will be added the possibility to vote for which asset to add as a collateral on the platform, and that is some serious power given to the people!
- Card advantages - COMING SOON: In the near future, NEXO token holders will get higher cashback rewards and more free ATM withdrawals when using the card. The current cashback is set at 2%, regardless of the purchase. It is unclear how this will be shaped, but one can assume that the higher the loyalty level, the higher the cashback reward.
- Affiliate bonuses - COMING SOON: There is currently no affiliate/referral program for NEXO but it was announced that, as part of Nexonomics 2.0, affiliation would finally become a thing and that the more tokens you will hold, the more rewards/ higher commissions you will receive.
Here is an overview of the Loyalty Levels and their active bonuses.
In the last 3 months, NEXO has been unfolding the Nexonomics ecosystem little by little, releasing exciting news more and more often, thus giving us reasons to believe that 2021 will be a great year for NEXO, the NEXO token and its holders. And, in my opinion, this is indeed what the future of finance should look like. Tokenized assets giving real power to users and investors alike, regardless of background, income, race, age or employment.
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Please note that this is not financial advice, nor do I consider myself a financial advisor by any means. Do your own research.
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