NEXO Complete Guide - A New Financial Revolution in Cryptocurrency Loans
Hello! Recently, as DeFi (decentralized finance) has become a hot topic, interest in NEXO has also increased. NEXO is not just a simple cryptocurrency, but an innovative platform that connects traditional finance and blockchain.
Don't worry if you are new to cryptocurrency and blockchain technology! Today, I will explain everything in detail about NEXO, including what kind of service it is, how it works, and how you can actually use it. I will explain even complex financial terms in an easy-to-understand way, so please read it comfortably!
Introducing NEXO - Where Cryptocurrency Meets Traditional Finance
NEXO is a blockchain-based financial platform launched in 2018, and is a pioneer in popularizing the innovative concept of 'Crypto-Backed Loan'. Simply put, it provides a service that allows you to deposit your cryptocurrencies such as Bitcoin or Ethereum as collateral like bank deposits and receive cash loans based on their value.
The biggest feature of Nexo is that you can secure cash liquidity without selling your cryptocurrencies. For example, if you believe that Bitcoin will rise in the long term but need cash right away, you can use Nexo to secure the necessary funds while still holding Bitcoin.
π‘ Nexo's Core Idea: ""I believe in the potential value of cryptocurrencies, but what should I do when I need cash right away?"" Nexo started from this concern. It is an innovative solution that solves the dilemma of cryptocurrency HODLers (long-term holders).
Nexo's History - A Global Fintech Success Story That Started in Bulgaria
Nexo's journey began in Sofia, Bulgaria in 2018. The company was founded by experienced fintech professionals, including founders Anton Nell and Karin Mitreva. They had already successfully run an online lending company called Credissimo, so they jumped into the cryptocurrency lending market based on their deep understanding of traditional finance.
In April 2018, Nexo successfully launched an ICO (Initial Coin Offering) raising $52.5 million. At the time, the concept of cryptocurrency lending was unfamiliar, but Nexo accurately identified and preempted this niche market.
In 2019, it officially launched the first cryptocurrency-backed lending service in Europe, and from 2020, it expanded its services to the entire world, including the United States. It has now grown into a global platform with over 4 million users in over 200 countries.
It has experienced explosive growth, especially during the popularization of cryptocurrency in 2021. With assets deposited on the platform exceeding $4 billion, it has firmly established itself as a leader in the cryptocurrency lending sector.
How Nexo Works - A Simple but Innovative Mechanism
How Nexo works is simpler than you might think. It’s the same basic concept as traditional collateralized lending, except that the collateral is cryptocurrency instead of real estate or cars.
- Deposit Cryptocurrency: Users deposit cryptocurrencies such as Bitcoin and Ethereum on the Nexo platform. The cryptocurrencies are safely stored in Nexo’s secure wallet.
- Collateral Value Assessment: Nexo evaluates the market value of the deposited cryptocurrencies in real time and calculates the loan limit based on this. Typically, loans are available for up to 50-90% of the collateral value.
- Loan Application: Users can apply for a loan for the amount they need. The approval process is automated and can be completed in minutes.
- Funds Disbursed: Approved loans are immediately paid to your bank account or Nexo account. You can receive them in various fiat currencies such as USD, EUR, GBP, etc.
- Interest Payment: Interest is calculated daily during the loan term and you can repay the principal and interest at any time.
Smart Interest Calculation System:
Nexo’s interest is calculated as simple interest, not compound interest, and interest accrues only on the loan balance. For example, if you borrow $10,000 and repay $5,000, interest accrues only on the remaining $5,000. Also, if you hold a certain amount of NEXO tokens, you can receive interest rate discounts!
NEXO's main features - Comprehensive cryptocurrency financial platform
NEXO goes beyond a simple lending platform to provide comprehensive cryptocurrency financial services. Let's take a closer look at how each function works.
π¦ Crypto Collateralized Loans
You can get cash loans with low interest rates starting at 0% per annum. You can use over 40 cryptocurrencies, including Bitcoin and Ethereum, as collateral.
π° Interest Earnings Accumulation
If you deposit cryptocurrency, you can receive interest of up to 12% per annum. It is calculated daily and maximizes the compounding effect.
π³ Nexo Card
It is a debit card that allows you to pay anywhere in the world with your cryptocurrency balance. You can also receive cashback rewards every time you use it.
π Automatic Investment
You can easily implement the dollar cost averaging strategy with the automatic investment function that regularly purchases cryptocurrencies.
⚡ Instant Trading
You can exchange over 400 cryptocurrencies instantly without fees. Quick portfolio adjustments are possible by leveraging market volatility.
π‘️ Insurance Coverage
Protect your assets with up to $775 million in insurance. Safety device in partnership with Lloyd's of London.
Nexo's Pros and Cons - A Balanced View
It's important to clearly understand the pros and cons before using Nexo. No service is perfect.
✅ Nexo's Key Pros
1. Instant Liquidity: You can secure cash without selling your cryptocurrencies. This is especially advantageous in terms of tax efficiency.
2. Competitive Interest Rates: NEXO token holders can get ultra-low interest loans starting at 0% p.a., which is much more favorable than traditional bank loans.
3. Fast Approval Process: Loans can be approved in minutes without complicated document screening. It is very useful when you need money urgently.
4. Flexible Repayment Terms: You can repay as much as you want at any time without a minimum repayment amount. Partial repayments are also freely possible.
5. Support for Various Cryptocurrencies: You can use over 40 different cryptocurrencies as collateral, including Bitcoin and Ethereum.
❌ Key Disadvantages of NEXO
1. Risk of Collateral Value Fluctuations: If the price of a cryptocurrency plummets, you may be asked for additional collateral or forced to liquidate. This is the biggest risk factor.
2. Centralized platform: Unlike DeFi, it is a centralized service, so there is platform risk. If there is a problem with Nexo, users may also be affected.
3. Regional service restrictions: Service use may be restricted in some countries or regions. Be especially careful in regions with strict regulations.
4. KYC procedures: Complete anonymity is not guaranteed because an identity verification process is required. This may be a disadvantage for users who value privacy.
How to use Nexo - Complete step-by-step guide
For those who are new to Nexo, we will explain the entire process from registration to actual loan in detail.
π Step 1: Sign up and set up an account
Go to the Nexo official website (nexo.io) and click the 'Sign Up' button. Enter your email address and password, and complete email verification to create a basic account. For security, please also set up 2-step authentication (2FA).
π Step 2: Complete identity verification (KYC)
You need to verify your identity to use the loan service. You need to upload your ID, proof of residence, etc., and go through selfie verification. It usually takes 1-3 days, so it's a good idea to prepare in advance.
π Step 3: Deposit cryptocurrency
Once verification is complete, you can transfer cryptocurrency to your Nexo wallet. Select the desired cryptocurrency from the 'Wallet' menu and press the 'Top Up' button to check the deposit address. We recommend testing with a small amount before making a full deposit.
π° Step 4: Apply for a loan
Check the loanable amount in the 'Borrow' menu and apply for the amount you need. If you carefully check the loan terms (interest rate, repayment method, etc.) and apply, it will be approved immediately.
π€ Step 5: Withdrawal of funds
Approved loan funds can be withdrawn to a linked bank account or exchanged for other cryptocurrencies within the Nexo account. Bank transfers take about 1-3 business days.
Comparison of Nexo and other platforms - objective analysis
There are several competing platforms in the cryptocurrency lending market besides Nexo. Understand Nexo's positioning accurately by comparing it with major platforms.
| Category | NEXO | BlockFi | Celsius | Compound |
|---|---|---|---|---|
| Platform Type | Centralized (CeFi) | Centralized (CeFi) | Centralized (CeFi) | Decentralized (DeFi) |
| Minimum Interest Rate | 0% (NEXO token holders) | 4.5% | 1% | Variable (typically 2-8%) |
| Loan limit | Up to 90% of collateral | Up to 50% of collateral | Up to 50% of collateral | Up to 75% of collateral |
| Supported assets | 40+ types | 10+ types | 20+ types | 20+ types |
| Insurance Guaranteed | $775 million | $100 million | $750 million | None |
| Special Offers | NEXO Card, Free Transactions | Credit Card | High Interest Rates on Deposits | Fully Decentralized |
π‘ Platform Selection Guide:
• If you want the lowest interest rates: Nexo (required to hold NEXO tokens)
• If you want the highest interest rates on deposits: Selius
• If you want complete decentralization: Compound
• If you want comprehensive services: Nexo
Nexo Community and Support - Connect with users around the world
Nexo is a vibrant global community