What Is NEXO (NEXO)?

TL;DR

The NEXO Token (NEXO) is the native token of the Nexo cryptocurrency exchange and lending platform, compatible with both ERC-20 and BEP-2. Users holding NEXO in their accounts on the Nexo platform get many incentives, including higher yields on their digital assets, free crypto rewards on card purchases, and borrowing rate discounts on crypto-backed credit lines.

Introduction

Nexo started out in 2018 as a crypto lending platform and is considered the pioneer of crypto credit lines. Nowadays, the Nexo platform is an entire crypto finance ecosystem where users can buy, sell, trade, and borrow against their cryptocurrencies. The latest addition to the suite is the Nexo Card – the world’s first crypto-backed card.

What is the Nexo ecosystem?

Nexo has over four million clients worldwide, with numbers rising drastically in 2020 with the release of their Earn product. The addition allowed users of the platform to receive interest on their crypto assets. This move attracted many new crypto enthusiasts who weren’t necessarily looking for loans but wanted to use their crypto to earn them passive income. 

The Nexo ecosystem is an all-around solution for everything crypto. Beginner users can buy their first crypto in a few clicks and start earning compounding daily interest automatically, while experienced users can borrow cash to use for their everyday expenses or to reinvest in more crypto. 

Instant Crypto Credit Line

Nexo allows clients to open an Instant Crypto Credit Line and borrow cash or stablecoins by utilizing their cryptocurrency holdings as collateral. Users can borrow from $50 to $2M with instant approval, no origination fees, and no monthly repayments, while funds become available within 24 hours. It can be partially or fully paid off in over 40 fiat currencies, stablecoins (USDT or USDC), or a combination of both crypto and fiat currencies.

To open an Instant Crypto Credit Line, all users need to do is use their cryptocurrency holdings as security for repayment. This will allow them to borrow a maximum of 13.9% APR, depending on their Loyalty tier and the ratio between the NEXO tokens and other crypto holdings in their portfolios. Should the digital assets serving as collateral start to depreciate in market conditions and the loan-to-value ratio increases, Nexo has employed an algorithm to help clients stay on top of their Instant Crypto Credit Lines and manage them effortlessly. These include margin calls, automatic collateral transfer to maintain an acceptable loan-to-value ratio, and automatic repayments.

NFT Lending Desk

Users can also borrow stablecoins, ETH, and other digital currencies against their Bored Apes and CryptoPunks NFTs. As with Nexo’s credit lines, this instant liquidity doesn’t require selling the digital assets. Users can borrow up to 20% of the value of their NFTs and spend or reinvest the load. As part of Nexo’s OTC services, users have a dedicated account manager to assist them throughout the process.

The Nexo Exchange

Over the years, Nexo has also developed their cryptocurrency exchange. It hosts popular coins like BTC and ETH, Layer 1 tokens like BNB, AVAX, and NFT and metaverse tokens like APE and MANA. Users of the Nexo Exchange can buy crypto with credit or debit cards and directly swap 300+ crypto pairs, including 140 rare ones. The exchange also has a simplified 1.25x to 3.00x leverage option. It is known as the Nexo Booster and allows users to buy more of their favorite cryptocurrencies by funding the transaction with a crypto-backed loan.

The Nexo Card

In April 2022, Nexo officially launched their crypto credit card. It allows users to spend the value of their crypto without actually selling it. It works by automatically borrowing fiat on everyday purchases while using crypto as security for repayment.

The Nexo Card can be used anywhere Mastercard is accepted. Card owners can use their Bitcoin, Ethereum, or 40 other cryptocurrencies as collateral to back the credit granted. This gives them fiat against their crypto upon each purchase. They can also earn rewards on every purchase or ATM withdrawal, which will be paid out in Bitcoin (up to 0.5% back) or the NEXO tokens (up to 2% back). Nexo doesn’t require minimum monthly repayments and doesn’t collect monthly, annual, or inactivity fees.

What is the NEXO Token?

In 2018, Nexo issued and distributed the world’s first compliant, dividend-paying, asset-backed token with utility features. Since the evolution from dividends to daily interest on NEXO, the token has continued to provide utility to Nexo users in the form of higher interest rates, lower borrowing rates, and free withdrawals on their platform. The exact benefits are determined by a tier-based Loyalty Program. The tiers depend on what percentage of an individual portfolio is held in NEXO Tokens. For example, if a Nexo user holds 10% of their portfolio in NEXO, they will be in the Platinum tier, which qualifies them for interest rates for most assets of up to 17% and five free crypto withdrawals per month. As of May 2022, the maximum interest rate on the platform is 36% on AXS.

For the past two years, as part of the tokenomics overhaul of NEXO, the company has been repurchasing its native token from the open market. This so-called Buyback program is aimed at boosting the token’s liquidity, thus reducing price volatility. There’s a limited supply of the NEXO Token with a hard cap of 525 million NEXO Tokens.

Closing thoughts

The Nexo ecosystem has risen in popularity with the simplicity of its all-in-one solution. Their earning product is automatic and taking a crypto-backed loan is intuitive. By holding NEXO Tokens, users can get more from their platform, and with the release of the Nexo Card, more and more people will join the Nexo community.