What is Nexo? Nexo is a blockchain-based system and a leading institution for digital assets. Unlike traditional banks, the company is the first of its kind in the crypto space. While banks usually ask for assets like a house or apartment as collateral, Nexo uses cryptocurrency to secure loans. Clients’ loans are approved in a matter of seconds and the funds go straight to the bank account.
This technology has made Nexo one of the leaders in the fintech space. The company was created by Credissimo in Europe. Since then, the company has accumulated over $155 million in cash while providing loans worth $120 million. Let’s take a look at how Nexo became a leader in the online consumer lending industry.
How does Nexo work?
Crypto assets have become a popular investment avenue for many investors in recent years. However, the ability to you grow your wealth with this type of investment is quite limited. The only option is to hold on to the crypto-investment until it appreciates in value and then sell. The fintech company, Nexo hopes to change the narrative on this.
With the help of blockchain technology, they have created the world’s first online lending platform for cryptocurrency. The Crypto Credit Lines will allow customers to take out loans using their cryptocurrency as collateral. This includes various currencies such as Bitcoin, Stellar and Ripple. Its goal is be an efficient and cost-effective way for borrowers to take out loans.
Another benefit of Nexo is the speed of obtaining the loan. Unlike traditional loans that come with a long waiting period, Nexo provides borrowers with instant access to the funds. Once the collateral AKA, the cryptocurrency is deposited into the account, the borrower can avail the cash. The amount is equivalent to the value of the cryptocurrency and is available in more than 40 currencies.
Moreover, if the crypto held appreciates in value, the credit limit of the borrower increases as well. The client can withdraw money against this limit. The interest is only charged on the actual amount that is borrowed. Nexo’s platform also ensures a high level of transparency with the help of blockchain technology and smart contracts.
In terms of loan repayment, this can either be done in fiat or cryptocurrencies. However, if borrowers use the Nexo token to repay the loan, they can earn a 50% discount rate on the interest due. This makes Nexo an ideal alternative to traditional financial institutions.
What is the Nexo token?
One of Nexo’s key features is the Nexo token. This token is SEC compliant, pays dividends and is backed by Nexo’s assets. The ERC-20 token, as it is commonly referred to, can be traded as a restricted security as stated by the SEC in the exemption file.
This token is a fairly new feature and can be purchased on the platform. Token holders receive 30% of the company’s profits in the form of dividends. The price of the investment has also remained fairly stable. It is estimated that over $1.5 million worth of Nexo tokens are traded every day. The tokens can be stored in the wallet or one that is compatible with Ethereum.
What is Nexo’s goal?
Nexo aims to change the conversation on cryptocurrency, given that this investment asset is the next big thing. An investment in cryptocurrency involves a large waiting period which can increase the risk of the value of the assets growing idle over time. Nexo ensures that crypto-owners make the best use of their investment. Users can trade in their cryptocurrency for real cash while obtaining security in the value of the digital assets.
The platform also hopes to increase the level of transparency in borrowing digital loans. Traditionally, loans made against crypto were operated by P2P platforms which often raised questions on its reliance and legality. This would often result in fraudulent transactions on these platforms. On the contrary, Nexo guarantees safety and security with modern blockchain technology and smart contracts managed by its Nexo Oracle system.
Nexo is a company to watch in the Fintech space. Its unique take on utilizing cryptocurrency to secure loans makes is an appealing feature for many investors. In addition to this is the Nexo token which is a great dividend investment. The company has made dividend payments worth over $6 million to its token holders so far. As Nexo grows and evolves, it is likely to become the next big player in the cryptocurrency market.