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Well known by name!
The following name has of course been mentioned many times before. And many people already know their way around NEXO, but why is Nexo so popular? Let me ask you another question… Did you know that if you put 10,000 euros in a savings account at the bank, you will not get 20 euros in interest every year? Personally, that doesn't make me very happy and probably neither do you. And exactly the latter… Nexo is working on that.
Credissimo
Nexo was founded in 2017 and originated from a large European Fintech group, Credissimo, which has been operational in the financial sector since 2007.
"Credissimo meets the highest legal requirements and is strictly supervised by several European regulators for banking and financial services."
Today, Nexo already has more than 300,000 customers and has completed more than $ 700 million in financial transactions in their short existence.
Nexo offers a variety of services, including providing loans to consumers and the ability to earn interest on crypto as well as euros and dollars.
Earning interest on Euro's, GBP's, Dollars AND Crypto's
That's right, there you have it ... Earning interest on fiat and cryptos, that's what we want to see. That is what makes us happy. And especially when we see that that interest is no less than 8% on stable coins, and euros and dollars. Because let's be honest, we no longer see that interest of 8% in bank accounts.
Compound your interest!
Nexo pays interest on a daily basis, which is also different from what a bank does, which only pays you interest once a year. At Nexo it is possible to get interest on your interest again. This is also possible at a bank, but only once a year. So in the end you will receive much more interest at Nexo, because you also receive interest on your daily interest. Compounding!
Partnered with Lloyd's.
There is indeed a difference between a savings account at the bank and companies like Nexo. Not only the interest is different, but also the risks. For example, your savings at a bank are always guaranteed by the State (up to an x amount, by the way), should the bank collapse, although you never have 100% certainty in this. With Nexo, this is not guaranteed by the state. And that's why Nexo has partnered with Lloyd's Bank in London to insure their assets. Lloyd's has been around since the year 1765 and each account is insured up to a value of $ 100 million.
Collateral
You get virtually no interest at the bank and at least 8% at Nexo. How is that possible?
Loans
Nexo's main activity is to provide loans. To take out a loan, someone must first deposit collateral, in the form of crypto. That crypto represents a value. You can borrow part of that value in euros, so more collateral must always be deposited than what is lent.
For example, if someone wants to borrow 5,000 euros, he must deposit about 10,000 euros in crypto. With this, a maximum of approximately 50% of the collateral can always be borrowed.
So people do it mainly to have cash available temporarily, without having to sell their crypto. As soon as they have repaid the loan, they also get their crypto (collateral) back.
As a result, Nexo always has more collateral under management than outstanding loans. Should someone not be able to repay their loan, Nexo can sell the collateral and get the money back for the loan.
EUROS NEEDED FOR LOANS
In order to make loans in euros to borrowers, Nexo must have access to those euros. These come (partly) from savers, who deposit euros into their Nexo account.
In exchange for this paid-up capital, you will receive 8% interest from Nexo on your deposited euros. They distribute a large part of their profit to their customers (the account holders).
SHARE OF PROFITS TO USERS
Unlike Nexo, a bank distributes a large portion of their profits to their shareholders, board and other stakeholders - not their account holders.
If you have a savings account with the bank, you will (as you know) hardly receive interest for the capital you have with the bank. You are, as it were, at the back of the queue.
Don't be under any illusions that Nexo is doing it out of the goodness of their hearts; they earn very well on all outstanding loans. After all, it is a company that wants to make a profit.
But that is also good for us, because it allows them to pay high interest to savers.
NEXO TOKEN
In addition to the many coins, euros, dollars and pounds, Nexo also has its own token, which is simply called Nexo. This token has three functions:
- Dividend: Nexo will pay out 30% of the profits they make to the holders of the Nexo token. By buying and holding this token, you will in fact be paid a dividend. This dividend is paid periodically to all Nexo token holders and can be purchased on various exchanges.
- Speculation: the Nexo token naturally represents a value and the higher the demand for this token, the higher the price will be. People speculate on this, in order to gain share price.
- Loyalty: Nexo token holders now also have the advantage that when at least 1/10 of their Nexo wallet (all deposits in the app) consists of Nexo token, you will receive a higher interest on the coins, euros, dollars and pounds in your account.
12% interest on fiat
You can now also receive 12% interest on your fiat. That is extremely high.
If the value of your savings account consists of at least 10% of those Nexo tokens, you will receive 12% interest on your deposited money instead of 8%. As described above: see it as a kind of loyalty reward. In exchange for investing in their dividend token, they offer you a higher interest rate.
So if you have savings that are doing nothing … it is worth a consideration to place it with Nexo.
And yes of course we are here in the crypto world.
Good news there too. Yes, Nexo also offers interest on various cryptocurrencies of course. With peaks of up to 12% on some crypto such as the Tether. To check how the interest rates on cryptos are determined, go to their website yourself
Nexo's own token
In addition, their own NEXO token is not doing that bad either. At the time of writing, this token is at $ 0.70, and given the increasing adoption in the crypto, the increasing demand for better interest on your savings in dollars and euros, I see the price of Nexo rising further.
Of course this is as you well know… NO FINANCIAL ADVICE, as always applies here. DO YOUR OWN RESEARCH.
And if you have something to add to this, I would of course like to hear it again!