Nexo has established itself as a frontrunner in the crypto borrowing and lending sector. However, does it still offer some of the best services in the industry? This article aims to explore that question. Nexo provides a range of services, including crypto-backed loans, high-yield savings accounts, and crypto payment cards. Since its inception as a straightforward crypto lending platform in 2018, Nexo has transformed into a comprehensive centralized finance platform that caters to millions of users globally. This review evaluates the platform’s security, primary features, interest and borrowing rates, token utility, fee structures, and more, to assist you in determining whether Nexo aligns with your financial needs.
Our Assessment of Nexo
Nexo stands out for offering impressive yields for crypto holders, reaching up to 16% on select assets. In contrast, other platforms such as Kraken and Binance typically provide around 5% annual yields on stablecoins. Investors seeking liquidity can secure their crypto assets as collateral and borrow against them, with annual percentage rates (APR) beginning at 2.9%. However, to access the most competitive rates, users must achieve higher loyalty tiers, which might not be feasible for everyone due to the requirement of maintaining a minimum balance of $5,000 and holding NEXO tokens. Participating in the loyalty program also grants users access to the Nexo Card, which allows spending from their account balance or borrowed funds while earning up to 2% cash back on purchases. For those who can meet the $5,000 minimum balance, joining the loyalty program may offer worthwhile advantages.
Advantages of Using Nexo
- Immediate crypto-backed loans with no credit checks.
- Borrowing rates starting at 2.9% APR.
- High-yield crypto savings accounts offering up to 16% APR.
- Nexo Card rewards of up to 2% cash back.
- Integrated Nexo Exchange featuring 1,500 trading pairs.
- Some features may not be available in specific regions, including the US and UK.
- To obtain the best rates, users are required to hold NEXO tokens and maintain a minimum balance of $5,000.
- Centralized custody entails counterparty risk.
Nexo Review Overview
Based in Zug, Switzerland, often referred to as the “land of finance,” Nexo operates as a centralized finance (CeFi) platform for crypto lending and borrowing. This centralization means that all assets are held by Nexo, and users must complete KYC (Know Your Customer) and AML (Anti-Money Laundering) processes to access its full suite of services. In contrast to decentralized platforms (DeFi), which are generally non-custodial and do not require KYC, Nexo’s centralized model offers certain benefits. Nexo provides competitive rates on various products, including high-yield savings accounts and crypto-backed loans, alongside a proprietary crypto credit/debit card for everyday transactions. Since its launch, Nexo has distributed over $1.2 billion in interest and currently manages more than $11 billion in assets. Notably, the platform also supports lending and borrowing in fiat currencies like GBP, USD, and EUR through FIATx stablecoins.
Assets Available on Nexo
Nexo accommodates over 100 cryptocurrencies, stablecoins, and fiat currencies for its lending and borrowing services. Users can earn yields or borrow against prominent coins such as Bitcoin and Ethereum, along with lesser-known altcoins like Morpho, Sonic, and Berachain. However, it’s important to note that not all cryptocurrencies are fully supported. Some assets classified as “Limited Assets” can only be traded on the platform and cannot be withdrawn to a non-custodial wallet. Examples of such assets include BONK, TRUMP, and PENGU, which can only be exchanged on Nexo.
Core Features of Nexo
Nexo presents a variety of tools and functionalities designed to help users optimize their financial returns. Let’s explore the most significant features.
Borrowing Assets on Nexo
Whether utilizing the mobile application or the Nexo website, securing a loan is a straightforward process. Users can use their crypto, stablecoins, or fiat currencies as collateral to instantly borrow funds. The absence of credit checks is possible due to Nexo’s over-collateralization model. Each asset comes with its own Loan-to-Value (LTV) ratio. For instance, with Bitcoin offering a 50% LTV on Nexo, one could borrow $50,000 using 1 BTC as collateral, assuming Bitcoin’s value is $100,000. If Bitcoin’s price falls to $60,000, the LTV rises to 83.33%, prompting automatic repayment and liquidation. Conversely, if Bitcoin’s price climbs to $150,000, the LTV would drop below 50%, allowing for additional borrowing against the same BTC collateral.
Earning Passive Income on Nexo
Nexo’s earning program is its standout feature, allowing users to generate passive income on their holdings through fixed-term or flexible savings options. Users opting for fixed-term savings can achieve the highest yields, with rates reaching up to 7% on Bitcoin and up to 8% on Ethereum. Earnings on USDC can reach up to 14%, surpassing many competing platforms. Assets locked in fixed terms can still be utilized as collateral for borrowing or spending via the Nexo Card. Fixed-term durations include one month for cryptocurrencies, three months for stablecoins, and three to 12 months for fiat currencies and the NEXO token. Users who choose flexible terms will encounter slightly lower rates, capped at 6% for Bitcoin, 7% for Ethereum, and 12% for USDC. However, the funds remain accessible for trading or withdrawal without lock-up periods. Both fixed and flexible savings support over 100 assets, including Bitcoin, Ethereum, and stablecoins.
Nexo Card Benefits and Rewards
Another notable feature is the Nexo card, a Mastercard that is globally recognized and offers up to 2% cash back rewards. Users have the option to choose between debit and credit modes, providing flexibility in fund usage. In debit mode, users can spend fiat assets, stablecoins, or cryptocurrencies held in their account, which continue to earn interest of up to 14% annually until fully expended. In credit mode, users can utilize their available borrowing balance, secured by their crypto assets as collateral.
Exploring the Nexo Exchange
Nexo also includes a built-in exchange where users can swap over 1,500 cryptocurrencies, stablecoins, and fiat currencies. The exchange employs a Smart Routing system that explores multiple exchanges to secure the best price for each transaction, often resulting in superior rates compared to DeFi platforms. Depending on their loyalty tier, users can also earn cashback rewards on eligible swaps, up to 0.5%. For corporate clients and high-volume transactions ranging from $250,000 to $3,000,000, Nexo provides an OTC exchange. Investors looking to diversify can opt for “Crypto Baskets,” which allow exposure to multiple currencies with a single transaction. These baskets encompass categories like Essentials (BTC, ETH, XRP, SOL, NEXO), DeFi (AAVE, ONDO, ENA, PENDLE, MOPRHO), and Memecoins (DOGE, PEPE, SHIB, BONK, TRUMP).
Nexo Mobile App Experience
For users who prefer managing their assets on mobile devices, the Nexo app is available for iOS, Android, and Huawei. The mobile application allows users to purchase up to 40 cryptocurrencies and access the Nexo exchange for trading across 1,500 pairs. Designed to replicate the web platform, the mobile experience ensures that all features are accessible on any device. Users have rated the app highly, with many praising its speed and functionality, although some have reported minor issues with haptic feedback on certain Android devices.
Nexo Booster and Referral Rewards
Nexo provides advanced features to help users enhance their portfolio. One such feature is Nexo Booster, which enables users to amplify their exposure by borrowing additional funds with leverage. Users can “boost” their exposure up to 1.5x to 3x, though transactions have a cap of 70% LTV. Additionally, Nexo’s Affiliate Program allows users to earn BTC rewards by referring friends and family to the platform. New members who register through an affiliate link and complete specific tasks enable the referrer to earn 0.5% of the deposited balance, though availability may vary by region, with some areas like the United States and United Kingdom lacking support.
Advantages of Holding the Nexo Token (NEXO)
The NEXO token, the native asset of the platform, is designed to enhance the benefits of the loyalty program. Token holders can unlock premium perks, including lower 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 2.9% rate. Additionally, token holders receive elevated interest rates on their savings accounts. Beyond earning and borrowing benefits, loyalty program participants enjoy extra perks, such as one complimentary fiat or crypto withdrawal per month for Platinum users, while both Gold and Platinum users gain access to a physical Nexo Card. NEXO token holders can also receive up to 0.5% cash back on certain token swaps using the Nexo Exchange. With a total supply of 1 billion, the NEXO token is built on the Ethereum blockchain, although not all tokens are currently in circulation, as indicated by CoinMarketCap. Presently, NEXO boasts a fully diluted market cap of $1.2 billion, placing it among the top 100 cryptocurrencies.
Assessing Trustworthiness of Nexo
Our analysis indicates that Nexo is a reputable platform. As a comprehensive crypto finance platform managing over $11 billion in assets and trusted by more than 7 million users, Nexo has shown resilience even during market downturns, unlike some competitors. The primary reason for Nexo’s ability to endure the crypto winter of 2022 is its over-collateralization strategy, whereby loans are backed by more assets than their value. Regarding platform security, Nexo employs institutional-grade security measures from Fireblocks and Ledger Vault. Additionally, users can activate features such as SMS verification, email notifications, and authenticator apps for enhanced security.
Nexo Fee Structure
The borrowing rates on Nexo range from 2.9% to 18.9% APR, influenced by factors like portfolio balance and loyalty tier. Smaller accounts tend to incur higher fees, whereas larger balances and NEXO token holdings can secure more favorable terms. For portfolios under $5,000, the APR is set at 18.9%. Balances exceeding $5,000 unlock the loyalty program and lower rates. The tiered structure is as follows: Base level has a flat 18.9% APR, Silver level (with at least 1% NEXO tokens) unlocks 17.9% APR, Gold level (with at least 5% NEXO tokens) offers up to 13.9% APR, and Platinum level (with at least 10% NEXO tokens) provides up to 10.9% APR.
Understanding Withdrawal Fees on Nexo
Withdrawal fees on Nexo adhere to a tiered approach similar to borrowing rates. Platinum-tier users benefit from one free withdrawal monthly, applicable to either crypto or fiat assets. In contrast, non-Platinum users incur withdrawal fees based on the asset and chosen withdrawal method. For fiat withdrawals, fees include: 5 EUR for SEPA transfers, 25 EUR for SWIFT transfers, 5 GBP for FPS transfers, 25 GBP for SWIFT, 10 USD for ACH, and 25 USD for SWIFT. Nexo Card users also face processing fees ranging from 1.99% for EEA countries to 3.49% for non-EEA countries. Currency conversions carry fees of 0.9% to 3.1%, while ATM withdrawals incur a 2% fee after surpassing the free monthly limit.
Nexo Mobile User Experience
For users who prefer mobile management, Nexo offers an experience comparable to its web application. Users can trade crypto, access credit lines, or manage their Nexo Card all from their mobile device. With thousands of reviews and an impressive four-star rating, Nexo’s app is recognized as one of the best in the industry. User feedback on platforms like Google Play and the App Store highlights the app’s speed and functionality, although some have mentioned minor issues with haptic feedback on certain Android devices. However, these issues do not significantly impact the platform’s overall performance.
Getting Started with Nexo
Initiating your journey with Nexo is a straightforward process. Here’s a brief guide on how to create an account in three simple steps: Visit the Nexo website, enter your email address, and you will receive a verification code. Once you input this code, you will be prompted to create a robust password. After signing up, you can log in and provide necessary personal information, including your country of residence, legal name, address, employment status, and source of funds. To fund your account, select “Add Funds” and choose your preferred deposit method. Nexo supports various deposit methods, including card transactions, crypto deposits via supported blockchain networks, bank transfers, and local payment options. Note that completion of KYC is required before making any deposits.
Nexo Customer Support
Nexo provides around-the-clock access to personalized client support and an AI-powered live chat option. Additionally, the platform features an extensive help center filled with articles and educational content to address common inquiries. While the AI assistant efficiently resolves many issues, users can also reach out to Nexo’s customer support via their official email for more complex matters.
Final Thoughts on Nexo
Nexo has emerged as a leading centralized platform for crypto borrowing and lending since its establishment in 2018. It has proven resilient during challenging market conditions that have affected competitors like BlockFi and Celsius. However, users should be mindful that Nexo operates as a centralized finance platform, meaning that asset custody lies with Nexo. Although the company employs advanced security measures, this aspect requires consideration. The platform effectively combines interest-earning accounts with crypto-backed credit lines, supplemented by a card designed for daily expenditures that also offers cashback rewards. Users can earn yields of up to 14% annually with flexible terms and up to 16% with fixed terms, contingent on the asset and loyalty tier.
