What is NEXO？

NEXO is the native token of the reputable Nexo crypto exchange. The following will refer to “Nexo” as the lending platform and “NEXO” as its native token.

Along with Celsius and BlockFi, Nexo is often cited as one of the best crypto loan service platforms. It provides collateral and lending services for over 40 cryptocurrencies, fiat currencies, and stablecoins. Users can get loans in fiat or stablecoins after depositing supported crypto tokens, such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), etc., as pledges in Nexo.

Nexo, launched in 2018 by Swiss fintech company Credissimo, has a proven record in the crypto space, with a focus on the European and US markets, and continues to work on government regulation to improve the platform’s overall performance, security, and compliance.

The most regulated crypto lending platform

Nexo is regulated by European financial institutions, registered with FinCEN, FINTRAC, and ASIC holds multiple state licenses and is audited quarterly by Deloitte & Touche, one of the Big 4 accounting firms.

Nexo is currently the only cryptocurrency lending platform to issue its native token, or NEXO, which is the only cryptocurrency currently certified by the SEC (Securities and Exchange Commission), and Nexo publicly declares that NEXO is a security-based token and complies with SEC Regulation D 506 (Securities and Exchange Commission Regulation D 506).

Leading Industry Position and Service Features

Nexo is one of the top 3 lending platforms because it consistently introduces groundbreaking products and services.

Credit Card Launch

In April of 2022, Nexo and MasterCard released a “crypto-backed” payment card. It allows users to make purchases similar to how they would work with a traditional credit card, but without first converting their crypto holdings into fiat currency. Nexo is a cryptocurrency credit card with no annual fee and 2% cash back on all purchases, usable anywhere MasterCard is accepted.

NEXO shares

To increase demand for NEXO, Nexo offers an incentive to users who continue to hold NEXO: users who hold NEXO will collectively receive 30% of Nexo’s loan business profits. Purchasing NEXO is thus analogous to purchasing Nexo shares, and holders receive a portion of the company’s profits as dividends. This dividend incentive system, however, will expire in June 2021.

Following the discontinuation of the dividend distribution system, Nexo is now paying daily interest to holders and has implemented a Loyalty program that divides users into four tiers based on the percentage of NEXO they hold on the Nexo exchange:

• Base: No NEXO Tokens are needed.
• Silver: At least 1% of the Portfolio Balance in your account must comprise NEXO Tokens.
• Gold: At least 5% of the Portfolio Balance in your account must comprise NEXO Tokens.
• Platinum: At least 10% of the Portfolio Balance in your account must comprise NEXO Tokens.
  
  Source: Nexo

The higher the tier, the better the reward terms, which include holding interest, purchase or swap rewards, borrowing discounts, Nexo credit card swipe rewards, and the number of free withdrawals.

NFT Lending Services

Source: Nexo

Nexo launched its NFT lending service in 2022, and its first loan was closed in May. An anonymous borrower who pledged two rare CryptoPunks Zombie NFTs as collateral received a loan of 1,200 ETH (Ether), worth over $3.3 million at the time.

Nexo is currently only accepting loans from blue chip NFT projects such as BAYC (Bored Ape Yacht Club) and CryptoPunks with a collateral value of more than $500K in NFT.

Security

Nexo secures funds and private keys using companies such as BitGo, Ledger Vault, and Bakkt, and provides $375 million in insurance on custodial assets to reduce the risk of asset theft.

Specifically, despite Nexo’s ongoing efforts to ensure legal compliance, it still poses certain risks. For example, unlike traditional banks, which people are familiar with, it is not required by the government to set up deposit protection. Furthermore, if there is a high demand for withdrawals in a short period of time, the platform may experience a run due to a lack of liquidity.

Immediately following the FTX crash in early November 2022, Nexo issued an official Twitter post on November 9 to reassure investors that it had no net exposure to FTX or Alameda at the time.

According to the chain data, Nexo withdrew approximately $220 million in assets from FTX over the last few days. However, Nexo officials clarified that the company had previously made a loan to Alameda and recovered the principal in full a few days ago with no loss to the company.

NEXO’s Performance

Price

On April 1, 2018, Nexo held a public ICO (Initial Coin Offering) and raised more than $50 million. Then, on May 1, 2018, NEXO began trading at $0.19 and continued to rise after the opening bell, surpassing $0.53 a week later, followed by the surge in the 2020 bull market, peaking at $4 in May 2021, and then oscillating between $1.50 and $3.50. In the second half of 2022, the price was around $1.

Source: CoinMarketCap

Market Capitalization

Nexo’s reputation as a lending platform has kept NEXO in high demand, propelling it to a spot in the top 100 of all cryptocurrency charts, where it sat at #72 as of the start of November 2022.

NEXO Buy-back Program

Nexo has continued its token buyback program in order to drive Nexo’s token economy and increase the value of NEXO, buying back $12 million worth of NEXO in October 2020, launching a $100 million buyback program in November 2021, which was completed, and then launching another $17.5 million buyback program in August 2022. The ongoing buyback program will aid in the improvement of liquidity, the reduction of volatility, and the increase of investor and user confidence.

Source: Nexo

Conclusion

Because of its high demand and the fact that it was released on one of the three largest lending platforms, NEXO stands out in terms of market value and performance compared to other cryptocurrencies.

Since the Celsius, FTX storm caused havoc in the cryptocurrency world, many CeFi institutions, including Nexo, have faced significant challenges. Can Nexo, which is well-known for its compliance, provide a satisfactory answer in this regard? Only time will tell.