Тhe saying ‘Don’t keep all your eggs in one basket.’ holds specially true for cryptocurrencies. The endless “hot vs. cold storage, custodial vs. non-custodial wallets” dilemma is one we know all too well. The Nexo Wallet allows you to not only manage all your digital assets from a single wallet without actually keeping them in one place, but also helps you to benefit from top-tier insurance!
So how does the Nexo wallet work, where are your digital assets stored, and where is the insurance coming from? Let’s find out here.
Nexo Custodial Wallet
The Nexo Wallet is a custodial wallet, which means that a third party actually stores and secures your assets. Nexo employs services from BitGo, Ledger Vault, and other well established partners to ensure top-tier storage for all assets placed under their care.
They use multiple trusted custodians in order to diversify their comprehensive custodial infrastructure. Consequently, users digital assets are held in a mix of hot and cold storage by partners in various geographical locations, making it exceptionally difficult for unauthorized parties to gain access to them, but also lending you the needed flexibility to be efficient in the dynamic crypto market.
Finally, the Nexo Wallet unifies all the information about your assets from our custodial partners and presents it in a comprehensive, simple, user-friendly UX so that you can instantly manage your crypto.
Nexo Insurance Policy
While Nexo prides itself on being the most security-focused financial provider for digital assets, we acknowledge that working with crypto has inherent risks. The blockchain space is evolving rapidly and with it – the potential threats. That’s why Nexo continuously works to offset these dangers through our robust insurance policy.
Nexo’s total insurance is currently $375 million and comes through partnerships with BitGo, Ledger Vault and other custodians whose facilities are insured via Lloyd’s of London and Marsh and Arch.
Nexo current insurance is already among the highest in the crypto lending industry. But they’re not stopping there. In line with their commitment to constantly improve the security infrastructure, Nexo aims to up its insurance to $1 billion by the end of 2021.
The Breakdown: Our Partners & the Services We Use
- BitGo – BitGo is our long-standing partner, serving primarily the retail side of our business. They provide us with cold storage, bank-grade class III vaults, through their SOC 2 Type 2-certified custodianship program, along with a multi-million dollar insurance packet via Lloyd’s of London.
- Ledger Vault – Much like BitGo, Ledger Vault gives us the opportunity to store custodial assets securely with the added bonuses of having instant access to those funds and full independence from cold storage. The Vault’s stress-tested hardware and software guarantee that we have access to funds on the Nexo platform even during black swan events.
- Fireblocks – With our client base growing fast, the business’ AUM now over $5B, our services and counter-parties base expanding, we needed a solution that allows us to quickly and easily view all of the assets we manage across the board. This is where Fireblocks comes in, providing us with an overview of all the funds we hold with BitGo, Ledger Vault and other custodians, on exchanges, and with institutional counterparties, as well as the USD in one of our major bank accounts.
- Other Partners – To provide greater security and insurance coverage, Nexo partners with a syndicate of leading custodians, storing a portion of assets with their various custodial services and securing additional insurance for our users. Stay tuned for details on these partnerships.
We trust you have enjoyed getting to know our security system more closely and look forward to building upon it in the near future.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
