Nexo is an automated lending platform redefining the borrowing experience for cryptocurrency enthusiasts. With Nexo you get the best of both worlds – instant access to cash while retaining ownership of your crypto assets. By borrowing against your crypto you also can avoid capital gains taxes that might arise from their sale.
According to their official Medium page, Nexo has raised funds in an SEC-compliant security offering and they have been able to develop a user-friendly crypto lending wallet and a profitable business model in less than six months.
Nexo vs other lending platforms
Nexo is backed by a 10-year-old European fintech company that doesn’t have additional fees, offers a quick application process and generates operating revenues from interest on crypto loans.
How does Nexo work?
Let’s say you want to buy a car but you don’t want to sell your Bitcoin. With Nexo you can deposit your crypto in your secure Nexo Wallet and get an instant credit line with many great advantages:
- Secured by leading audited custodian BitGo with $100M insurance for custodial crypto assets
- Minimum amount of $500, maximum – $2,000,000
- Automated and guaranteed instant approval with no credit checks
- Interest from 5.9% per year (APR) only on what you use
- No installments, no minimum loan repayments
- Same/next day free local bank withdrawals
- Available worldwide in 200+ jurisdictions
- 45+ fiat currencies (USD, EUR, JPY, etc.)
- No hidden fees, no FX commissions
An important consideration in crypto loans is what happens when price of your collateral goes down. There are several options according to Nexo’s whitepaper:
- Option 1
When the price decreases, you can transfer additional crypto assets to your Nexo wallet in order to rebalance the loan limits.
- Option 2
You can repay the difference between the loan limit and current loan outstanding amount by wire or by transferring crypto.
- Option 3
As a last resort, the Nexo Oracle will initiate a partial rebalance by selling small portions of your collateral
Why not selling crypto on exchanges?
Without having to sell your digital assets on exchanges, you don’t have to pay any fees. And with no sale event, there are no capital gains taxes.
Plus, Nexo doesn’t perform any credit checks that could damage your credit rating, and, with blockchain, all your smart contracts will be totally transparent.
Last but not least, the Nexo token holders will also receive 30% dividends from Nexo profits.
The Nexo technology
- Nexo Oracle
Nexo Oracle is an automated system that maintains the following elements:
1) wallet maintenance
2) data analytics
3) real-time asset monitoring, funds distribution
4) automated notification
5) repayment analytics
- Loan contracts
The client transfers money to their secure Nexo wallet. The Nexo Oracle constantly evaluates loan contracts. Once any of the conditions of the contracts are satisfied, the code triggers an automated action.
With the huge demand for crypto credit lines, the Nexo team has already processed around $300, 000,000 in 7 months. Much so, due to a user-friendly interface of their wallet.
The Nexo platform has seen a great deal of evolution, with new collateral options, new products and more currencies added on a regular basis.
New products have also been released, including the signature “Earn Interest” product which allows investors to earn up to 8% on per year on any major stablecoin.
It doesn’t matter if you are looking for access to cash or a return on your idle assets, the Nexo Wallet offers something for all cryptocurrency enthusiasts.
That being said, they constantly work on their product and give you a great opportunity to quickly set up a crypto loan and get access to instant cash.