Nexo lets users secure fiat loans using cryptocurrency as collateral. It was established in 2018 as a blockchain-based alternative to conventional banking. The peer-to-peer environment welcomes lenders and borrowers. The former gain high interest on their assets, and the latter borrow fiat instantly without credit checks. This is typical for reputable crypto platforms. Check this Nexo comparison to see how it stacks up against competitors.
To use their crypto assets, borrowers deposit them to their wallets on Nexo. Borrowing does not deprive them of ownership, but they may not use their coins until they repay the debt. This system provides liquidity automatically and more flexibly than do conventional financial institutions.
Currently, Nexo accepts 20 coins, including Bitcoin, Cardano, Ethereum, and Ripple. The platform also has a native token called Nexo. Blockchain technology provides transparency through smart contracts.
After creating a Nexo account, you may deposit your funds and secure a loan. The loan-to-value ratio (LTV) varies between 15% and 90%, depending on the asset. The lowest ratio is provided for loans backed by the native token, while Bitcoin and Ethereum both require 50%. To withdraw fiat, you need to provide your bank account. To withdraw stable coins, you need your wallet address.
The APR for the credit lines starts from only 5.9%. What’s more, users can spend the funds at any time and pay interest on the amount they borrow.
The Nexo card allows you to pay in the local currency. Also, more than 40 million merchants accept this card.
Over the past two years, the platform has processed loans worth more than $5 billion for nearly a million users.
40+ fiat currencies are available, while the collateral options include 22 coins.
You may borrow fiat, USDT (Tether), or USDC (USD Coin).
The size of the loan may vary from $10 to $2 million.
The custodial assets are insured for $100 million and secured by the SEC-approved custodian BitGo trust.
The interest rates for deposits are rather attractive. For example, if 10% of your holdings are in the Nexo tokens, they are 12% on fiat and stablecoins and 8% on crypto.
As Nexo does not perform credit checks, anyone who registers an account and deposits collateral with Nexo may access the loans. However, borrowing fiat requires basic and advanced verification.
The platform does not support wrapped coins, which are coins from other blockchains. Importantly, if you transfer these assets, you may lose them permanently.
Additionally, if your collateral is insufficient, Nexo may automatically transfer a portion of your assets from the savings wallet.
Is Nexo Safe?
Yes, this platform is safe. First, it is licensed and regulated in the EU. Moreover, it has a strong emphasis on security and trust and follows all know-your-customer (KYC) and anti-money-laundering (AML) standards to the letter.