Nexo: A Leader in Crypto Borrowing and Lending
Nexo has established itself as a front-runner in the cryptocurrency borrowing and lending sector. However, the question remains: does its current offering still hold up against competitors? Nexo operates as a comprehensive crypto platform that provides crypto-backed loans, high-yield savings accounts, and cryptocurrency payment cards. Since its inception in 2018 as a basic lending service, it has transformed into a robust centralized platform catering to millions of users globally. This review will explore Nexo’s safety measures, key features, interest and borrowing rates, token utility, fee structure, and additional insights to help you determine if Nexo aligns with your financial goals.
Our Assessment of Nexo
Nexo stands out by offering impressive yields for cryptocurrency holders, with potential returns reaching as high as 16% on select assets. In contrast, other platforms like Kraken and Binance typically provide annual yields of around 5% on stablecoins. For investors seeking liquidity, Nexo allows them to lock their crypto assets and borrow against them, with starting annual percentage rates (APRs) at 2.9%. However, obtaining the most favorable rates requires unlocking higher loyalty tiers, which necessitates a minimum balance of $5,000 and the holding of NEXO tokens. Joining this loyalty program also grants users access to the Nexo Card, enabling them to utilize their account balance or borrowed funds while earning up to 2% cash back on purchases. For those able to meet the $5,000 minimum balance, participating in the loyalty program could be advantageous.
Advantages and Disadvantages of Nexo
- Pros:
- Instant crypto-backed loans without credit checks
- Borrowing APR starts at 2.9%
- High-yield crypto savings accounts offering up to 16% APR
- Nexo Card providing up to 2% cashback rewards
- Integrated Nexo Exchange with over 1,500 trading pairs
- Cons:
- Some features may not be available in specific regions, like the US or UK
- Best rates require holding NEXO tokens and maintaining a minimum balance of $5,000
- Centralized custody introduces counterparty risk
Nexo Review Highlights
Nexo ranks among the premier centralized finance (CeFi) platforms, offering high-yield savings and competitive APRs on crypto-backed loans.
- Supported Assets: Over 100 cryptocurrencies, stablecoins, and fiat currencies
- Borrowing APR Range: Between 2.9% and 18.9%, depending on loyalty tier
- Interest Earnings: Up to 10% on cryptocurrencies and up to 16% on stablecoins, based on loyalty tier
- Nexo Card Benefits: Dual debit/credit modes, up to 2% cashback, spend without liquidating crypto
- Fees and Withdrawal Costs: Vary based on the withdrawal method
- Regulation and Licensing: Complies with regulations, holding licenses across 150 jurisdictions
- Insurance Coverage: No external insurance providers
Nexo Overview
Based in Zug, Switzerland, known for its financial services, Nexo is a centralized finance platform for crypto lending and borrowing. This structure implies that all assets are held in Nexo’s custody, and users must complete KYC and AML processes to access full services. In contrast, decentralized finance (DeFi) platforms typically do not require KYC verification and are non-custodial. Nexo’s centralized nature provides benefits, including competitive rates on high-yield savings accounts, crypto-backed loans, an internal crypto exchange, and a proprietary credit/debit card for everyday transactions. Since its launch, Nexo has disbursed over $1.2 billion in interest and currently manages over $11 billion in assets. Notably, the platform supports not just digital assets but also allows users to lend and borrow fiat currencies such as GBP, USD, and EUR in the form of FIATx stablecoins.
Assets Available on Nexo
Nexo supports more than 100 cryptocurrencies, stablecoins, and fiat currencies for its lending and borrowing services. Users can earn yields or secure loans against leading cryptocurrencies like Bitcoin and Ethereum, as well as lesser-known altcoins such as Morpho, Sonic, and Berachain. However, not all cryptocurrencies are fully supported; some assets fall under the “Limited Assets” category and can only be traded on Nexo without the option to withdraw them to a non-custodial wallet. For instance, coins like BONK, TRUMP, and PENGU are categorized as Limited Assets.
Core Features of Nexo
Nexo provides various tools and features designed to optimize users’ financial growth. Here’s an overview of some of the platform’s most significant offerings.
Borrowing on Nexo
Accessing loans through Nexo’s mobile app or website is straightforward. Users can use their cryptocurrency, stablecoins, or fiat as collateral to instantly secure a loan. There are no credit checks involved, as the process is automated through over-collateralization. Each asset comes with its own Loan-to-Value (LTV) ratio. For example, Bitcoin offers a 50% LTV on Nexo, which means if one holds 1 BTC valued at $100,000, they can borrow $50,000. If the value of BTC falls to $60,000, the LTV would rise to 83.33%, potentially triggering automatic repayment and liquidation. Conversely, if BTC’s value increases to $150,000, the LTV would fall below 50%, allowing for further borrowing against the same collateral.
Earning Passive Income on Nexo
Nexo’s notable earning program enables users to gain passive yields on their holdings, available through fixed-term or flexible savings options. Those opting for fixed-term savings can achieve the highest yields, reaching up to 7% on BTC and 8% on ETH, while USDC can yield up to 14%, surpassing many competitors. Fixed-term assets can also serve as collateral for borrowing or spending via the Nexo Card. The fixed terms require locking cryptocurrencies for one month, stablecoins for three months, and fiat currencies and NEXO tokens for periods ranging from three to twelve months. Flexible terms offer slightly reduced rates of up to 6% on BTC, 7% on ETH, and 12% on USDC, but without lock-up periods, users can access their funds anytime. Both savings options support over 100 assets, including Bitcoin, Ethereum, NEXO, XRP, and various fiat currencies.
Nexo Card Benefits
The Nexo Card is another appealing feature, functioning as a Mastercard that offers up to 2% cashback on purchases. Users can switch between debit and credit modes, providing flexibility in fund usage. In debit mode, payments are made with fiat assets, stablecoins, or cryptocurrencies held in the user’s account, which continue to earn interest until spent. In credit mode, users can utilize their available borrowing balance secured by their crypto assets.
Inside the Nexo Exchange
Nexo incorporates a built-in exchange, allowing users to swap among over 1,500 supported cryptocurrencies, stablecoins, and fiat currencies. The exchange utilizes a Smart Routing system, which scans various exchanges to find optimal prices for each transaction, often delivering better rates than DeFi platforms. Depending on loyalty tier, users may also benefit from cashback rewards on eligible swaps, earning up to 0.5% back. For larger trades ranging from $250,000 to $3,000,000, Nexo provides an OTC exchange option. Additionally, users can diversify their portfolios by swapping into “Crypto Baskets,” which offer exposure to multiple currencies in a single transaction.
Nexo Mobile Application Functionality
For those who prefer mobile access, Nexo offers an app available on iOS, Android, and Huawei devices. The app allows users to purchase up to 40 cryptocurrencies and trade across 1,500 pairs, with a user experience that mirrors the web platform, ensuring all features are accessible on any device.
Nexo Booster and Referral Program
Nexo introduces advanced features like the Nexo Booster, enabling users to amplify their portfolio by leveraging additional funds. Users can enhance their exposure by 1.5x to 3x, though transactions are capped at 70% LTV. The platform also features an Affiliate Program, rewarding users with BTC for referring friends and family. New members who register through an affiliate link and complete specific tasks allow the referrer to earn 0.5% of the deposited balance, although availability may vary by region.
Benefits of Holding the Nexo Token (NEXO)
The NEXO token serves as the platform’s native asset, enhancing its loyalty program. Holding NEXO tokens grants users access to premium benefits, including reduced loan rates based on their loyalty tier. For instance, Gold tier users enjoy an annual rate of 5.9%, while Platinum tier users benefit from a rate of 2.9%. Token holders also receive enhanced interest rates on their savings. Beyond financial advantages, holders of the token experience additional perks, such as one free withdrawal per month for Platinum users and access to a physical Nexo Card for both Gold and Platinum members. The NEXO token, which has a total supply of 1 billion and is built on the Ethereum blockchain, currently has a fully diluted market cap of $1.2 billion, positioning it among the top 100 cryptocurrencies.
Is Nexo a Trustworthy Platform for Your Assets?
Research indicates that Nexo is a reliable platform for managing cryptocurrency investments. With over $11 billion in assets under management and a user base exceeding 7 million, Nexo has shown resilience even during challenging market conditions, such as the 2022 bear market. Its approach of over-collateralization has been a key factor in its stability, ensuring that loans are backed by more assets than the borrowed amount. Nexo prioritizes security through advanced tools from Fireblocks and Ledger Vault, and users can also utilize SMS verification, email, and authenticator apps for added protection.
Nexo’s Fee Structure Explained
Borrowing costs on Nexo range from an APR of 2.9% to 18.9%, influenced by factors like portfolio balance and loyalty tier. Smaller accounts typically face higher fees, while larger ones benefit from lower rates. For portfolios below $5,000, the APR is set at 18.9%. As balances increase beyond this threshold, users can access the loyalty program for reduced rates. The various tiers are as follows: the base level has an APR of 18.9%, Silver is unlocked with 1% NEXO tokens at 17.9%, Gold with 5% NEXO tokens at up to 13.9%, and Platinum with 10% NEXO tokens at 10.9%. Withdrawal fees also vary by tier, with Platinum users receiving one free withdrawal each month, while others incur fees based on the asset type and withdrawal method.
Nexo Mobile Experience
For users who prefer mobile management, Nexo provides a seamless experience similar to its web application. Users can swap cryptocurrencies, establish credit lines, or manage their Nexo Card effortlessly. With thousands of positive reviews and a four-star rating, Nexo’s app is recognized as one of the industry’s best. User feedback highlights speed and functionality as significant strengths, although some Android users reported minor issues with haptic feedback, which is not critical to overall performance.
Getting Started with Nexo
Creating an account on Nexo is a simple process. Follow these steps to get started: Visit the Nexo website and input your email address. After receiving a verification code, enter it on the site and create a strong password to complete your registration. Once logged in, provide personal information, including your country of residence, legal name, address, and regulatory details about your employment and source of funds. To make your initial deposit, select “Add Funds” and choose your preferred deposit method, which may include card transactions, cryptocurrency deposits, bank transfers, or local payment options. Note that identity verification through KYC is required before fund deposits.
Nexo Customer Support and Assistance
Nexo offers 24/7 personalized customer support and a live chat option via an AI assistant. Users also have access to a comprehensive help center filled with articles and educational resources that address common inquiries. The AI bot delivers a user-friendly experience, effectively resolving issues in a timely manner. Should further assistance be needed, users can contact Nexo’s customer support via email.
Concluding Thoughts on Nexo
Since its launch in 2018, Nexo has emerged as a leading platform for centralized crypto borrowing and lending, showcasing resilience in the face of market downturns that have affected competitors like BlockFi and Celsius. While Nexo employs advanced security measures, users should remember that it is a centralized finance platform, meaning Nexo retains custody of assets. The platform effectively blends interest-earning accounts with crypto-backed credit lines and offers a payment card that facilitates daily transactions while providing cashback rewards. Depending on asset type and loyalty tier, users can earn up to 14% annually with flexible terms and up to 16% with fixed terms.
