Nexo is a cryptocurrency lending platform that offers users a high annual percentage yield. The platform provides between 6% and 12% APY for various cryptocurrencies, including BTC, ETH, LTC, BCH, EOS, XLM, TRX, and XRP. NEXO coin, the native token of the blockchain ecosystem, is attractive to those who wish to invest in the project. With the article of Zatrun.com, let’s take a closer look at this leading CeFi crypto project.
What is Nexo and How Does It Work?
Nexo (NEXO) is the world’s largest cryptocurrency credit provider that operates in the central finance (CeFi) sector, based in Switzerland. The project, which was launched in April 2018, provides quick and instant access to cash. It also supports users to maintain ownership of their digital assets without the need for credit checks. To accomplish this, it provides flash crypto loans, gaining a fast and strong reputation in the field. CeFi operates differently from DeFi because it serves as a bridge between traditional lending and blockchain worlds.
All users need to deposit the supported cryptocurrencies (Bitcoin, Ethereum, XRP, Cardano, Monero, etc.) to their wallets and then receive cash-based tokens. As of November 2020, the Swiss-based project had 800,000 users and provided access to crypto through more than 40 fiat currencies. The company has processed more than $3 billion in crypto-based loans.
The project’s business model employs a “conservative leverage” strategy to protect both the company and its customers. Platform allows customers to borrow a certain percentage of the value of their cryptocurrencies, protecting them from daily fluctuations in crypto prices and maintaining the loan-to-value ratio. This reduces the likelihood of customers losing their cryptocurrencies.
In addition to the success of the model, Nexo’s Oracle provides real-time monitoring and tracking of changes in the price of a cryptocurrency. Oracle also includes a data-pulling feature from various sources to prevent any price inconsistencies when lending to a customer.
Is It a Good Investment?
NEXO coin is the company’s native token that forms the basis of the credit and deposit ecosystem. Holding the token gives buyers the right to a 30% share of the company’s profits, such as dividends. Team claims to have paid out over $9 million to token holders from 2018 to 2021.
As a central finance platform serving the crypto space, Nexo has a market cap of over $428 million. The cryptocurrency ranks 95th on CoinMarketCap’s largest tokens list. Despite the current DeFi crisis, the project appears to be holding strong and poised to emerge from the bear market in a robust manner.