- NEXO is an instant crypto loan lending platform
- The platform is based on the NEXO Oracle technology and launched NEXO Card in April 2022
The current cryptocurrency market is flourishing as more digital platforms enter the sphere and provide improved features and new user elements like NFTs and meta-based gaming. However, still, a major problem hangs around using these tokens. Token or digital asset holders have no way to get instant liquidity or fiat currency in case of an emergency or instant investment opportunity. They have to rely only on selling their assets which prevents them from gaining any future gains from them.
Also, the exchanges and platforms charge expensive gas fees and need a time of 2-3 days for processing.
What and Why NEXO?
NEXO platform offers users instant-crypto-based loans so that they can get instant liquidity anytime without losing ownership of their assets. The platform is fueled by Credissimo, a Europe-based FinTech group with millions of happy users. The company aims to use blockchain technology, through its NEXO platform to solve the issues of finance in this emerging digital asset industry.
There are still some regulatory and infrastructural limitations to cryptocurrencies that prevent their holders to invest in real-time opportunities. Cryptocurrency transactions are limited to inward only, i.e. within their ecosystem only, with just a few transactions meeting the outside world. Users can use their assets to get instant crypto loans through NEXO, rather than keeping them idle in their wallets. They can get instant cash in USD, EUR, or JPY by transferring their token into a NEXO wallet.
Digital asset owners only have the option of selling their NFTs or tokens through exchanges or marketplaces to have liquidity. This means a loss of ownership and deaf to future profits from holding. NEXO clients enjoy their crypto wealth through instant loans and retaining 100% ownership of their digital assets.
The exchange platforms charge hefty transaction fees, platform fees, and withdrawal fees. Moreover, selling any digital asset makes it tax liable scooping 30% of profits. While getting loans, does not include it in the selling class, meaning no tax. Also, NEXO charges no platform or transaction fees.
The consumer lending market is a major economic driver of the world with a simple principle, “ lending depends on spending” as its backbone. Loan institutions carry out Credit checks before giving loans, to minimize the risk of default and decide an acceptable interest rate based on the debtor’s risk profile. This tiresome process upsets most people because of the time consumed and unfair interest rates set by the creditors. NEXO does not carry out credit checks before lending as all the loans are backed by the crypto assets stored in the NEXO wallet. It achieves these through transparent, smart contract-based loan contracts which are immutable once signed and stored on blockchain providing easy access to everyone.
Components and Features
NEXO Oracle
The most essential technology for the NEXO platform which automatically handles all the critical steps, is responsible for developing loan contracts, which are smart-contract-based computer protocols to ensure a trustless relationship between a customer and NEXO. Oracle is involved in real-time data monitoring of the value of the assets locked in the NEXO wallet, which it does by comparing results from a minimum of 6 independent sources. This prevents risk for both the client and NEXO.
The clients are continuously updated about their repayments, changes in assets price, and outstanding balances through notifications sent via SMS, E-mail, or NEXO wallet.
Nexo Card
The NEXO card can be used for everyday payments or even ATM withdrawals with their NEXO wallet digital assets as collateral. This card is accepted anywhere the Mastercard works. The card doesn’t collect any monthly or inactivity fees and is equipped with technologies such as spending analytics and budgeting tools.
NEXO Token
The platform has its native token, NEXO, and encourages users to repay loans through NEXO tokens to avail discounts on interest.
Final Thoughts
NEXO runs on a strong risk management model which ensures that a customer’s assets value in the NEXO wallet must always be more than the outstanding loan value. If the crypto price increases it notifies the customer of the increased loan limit. However, if the price decreases it calculates the difference and asks customers to either add more assets to their wallet or do a partial repayment of the loan to cover up the difference. Although such instant loans are good for instant cash, customers should also be aware of the risks involved in such a volatile industry.