In this article, we put Nexo through its paces. We take a closer look at the crypto-credit functions, the lending functionalities, Nexo’s native token (NEXO), the Nexo credit card and the possibility to invest fiat money, cryptocurrencies and stablecoins at a fixed or flexible rate of return.
Blockchain and crypto company Nexo, based in Bulgaria, is a subsidiary of Credissimo. The leading fintech company was founded in 2007 and has, today, several hundred thousand customers in Europe and brokered loans worth hundreds of millions of euros.
Credissimo launched Nexo at the end of 2017 as the world’s first instant crypto loan company. Nexo is thus not only a 10-year success story of a well-known FinTech company but also an innovative idea that offers borrowers and investors new opportunities. The Nexo platform was launched in 2018 and titles itself “The world’s largest and most trusted crypto lender”. Nexo is currently offering its services to over 2 million customers.
Regulation and Security
Nexo companies hold all required licenses and registrations in various jurisdictions worldwide and constantly bring their operations in line with newly adopted legislative changes.
A huge Plus for this crypto lending and earning platform is, that Nexo also offers first-grade security, segregated Multi-Signature Cold wallets and $375,000,000 digital assets coverage via their custodians BitGo, Insured Custody and Ledger Vault.
All customer assets are stored in bank-grade Class III vaults while Nexo’s partners allow instant access to customer funds and complete independence from third-party providers. Despite all precautions, it’s necessary to highlight that there is no absolute and bullet-proof safety and depositing funds and assets to any (financial) institution bears risks. By sending cryptocurrency to Nexo, you have ultimately no control over the private keys of your cryptocurrencies. The standard rule “Not your keys, not your coins” needs to be kept in mind.
A user account is created within just a few minutes. The verification process can take a few attempts until Nexo accepts all photos for personal identification. However, once this process is complete, the user can take advantage of all of Nexo’s functions and services. There are three different levels of verification, but ultimately, every user should be fully verified (“Advanced Verification”) to enjoy all platform functionalities and offers.
Typically, an ID document and a selfie suffice to pass the Advanced Verification. The account and verification approval are often completed within just minutes.
Instant crypto loans
Advanced verification is required for loans above $10,000. Nexo’s instant crypto loans are available as soon as a client has funds in any of their digital asset wallets. By selecting the “Top up” button next to the relevant wallet, the user can deposit funds and subsequently receive a credit line instantly, without any credit checks, since the deposited funds are used as collateral. Available assets at the point of writing are:
When a loan is taken out, the interest rate is calculated automatically from the start and broken down transparently for the user – without hidden costs or fees. Interest rates start at 6.9% APR and depend on the customer loyalty level. Regarding the terms of repayment: the repayment of a loan must take place within one year. However, unlike most banks, there is no fixed monthly instalment that must be serviced.
The annual interest is broken down to the crypto loan and added up daily to the amount to be paid. There is, therefore, also the possibility of repaying each loan at any time without additional costs. On the other hand, the outstanding payments grow daily if no repayment is made.
Of course, this principle only works up to a certain extend. After that, Nexo has the right to sell part of the deposited funds/assets. However, before this limit is reached, the Nexo system automatically warns several times. It thus automatically prompts the client to repay the loan or provide further deposits as collateral.
With a Nexo credit loan, clients can withdraw cash or stablecoins or use the Nexo Card (Mastercard). The client is then only charged interest on the amount they actually withdraw or spend.
When taking out a loan, the annual interest depends on the cryptocurrencies deposited. If Nexo’s native cryptocurrency is used as collateral, then the borrower gets the lowest interest rate. Moreover, Nexo additionally offers to pay off the taken crypto loan entirely in NEXO tokens. This reduces the amount to be paid by about 50%. However, these two functions cannot be combined: collateral = deposited assets.
Earning daily returns with FIAT, cryptocurrencies and stablecoins
Nexo’s business model also offers investors a wealth of attractive opportunities. Interest can be earned every day without hidden costs or fees. Here, too, the process could hardly be more straightforward: The customer deposits the desired funds (FIAT, cryptocurrency or stablecoin) and automatically starts earning interest. The returns are then credited to the client’s wallet daily.
There are several ways how interest rates can be boosted. One way to score higher interest rates is to upgrade within Nexo’s Loyalty tiers. Here, the more NEXO tokens you hold compared to all other assets, the higher the loyalty tier and APY. Below is a breakdown of the different Nexo Loyalty tiers:
Another way to increase interest returns is to create individual “fixed terms”. Depending on the chosen asset, various options can be selected, starting with one month, up to twelve months contracts – the longer the fixed term, the higher the yield.
The above options boost both in-kind asset earnings as well as returns paid in NEXO. However, those interest rates can further be increased by an additional 2% when the account holder switches from in-kind to receiving returns in the native NEXO token.
One aspect where Nexo lags other crypto lending platforms, such as Celsius, for example, is that customers can only select to earn interest of all their deposited assets in NEXO tokens or none of them (except for NEXO in-kind earnings itself, of course). Individual, asset by asset settings, as seen on Celsius is currently not available yet. For example, if you hold BTC, Ether and USD and choose to earn NEXO tokens, all interest rate earnings are received in NEXO. A user cannot select this on a case-by-case basis.
Therefore, if you prefer to earn cryptocurrency/stablecoin, you must keep your reward earning settings at “in-kind”.
Nexo’s native platform token NEXO is not only available for raising interest rate levels, high yield returns and better loans, it is also an attractive speculative asset.
Nexo also offers borrowers and investors a Nexo card. This works similarly to a credit card and can be conveniently integrated into everyday life. With it, the crypto loan taken out can be used with ease, without having to make additional transactions or withdrawals. Moreover, there are no hidden costs, no additional fees and no minimum monthly repayment.
The advantage here is that the user does not have to sell their cryptocurrencies. Via the Nexo card, the credit line for the deposited cryptocurrencies is calculated automatically and can be used by the user anywhere at any time. With an interest rate of around 8% per year, this is a real alternative to Mastercard, Visa and the like.
In addition to the ‘classic’ credit card, Nexo also offers a digital credit card in its app. This credit card is secured with various digital assets and is subject to the highest security standards. In addition, the Nexo app offers a full analysis of spending, a tool to keep an eye on one’s budget and the blocking/unblocking of the credit card.
Customer Service and Support
Nexo’s customer service features include a decent Help Centre section (FAQs) and a “submit request” option. You can also follow Nexo via Facebook, Twitter, Reddit, Telegram and Medium.
In our experience, Nexo’s support team is quick to reply, and their attitude and responses have always been professional and complete.
Ease of use, fast loan disbursement, high security standards, and up to 10 % interest on savings deposits speak in favour of Nexo. However, caution is also advised, as there is no access to the private keys of tokens deposited to the platform. However, Nexo, one of the first crypto lending and earning platforms, has been around since 2018 and is thus one of the most trustworthy at this point. Nexo’s $375 million insurance on all custodial assets is another factor that makes this crypto platform one of the most safe and secure on the market today.
Lots of positive customer reviews and feedback for Nexo over the past years confirms our conclusion that Nexo is one of the best digital assets borrowing and earning platforms on the market at this point in time.