NEXO: The Utility Token for the Nexo Lending Platform
Nexo is a European private instant lending platform that enables users to borrow fiat currencies and stablecoins against their cryptocurrency collateral. By holding NEXO tokens in their portfolio, users can participate in the loyalty program and receive rewards and discounts.
Prior to 2021, NEXO token users who held their coins on the platform received dividends. The company allocated 30% of its revenues to payouts for native token holders. Most of the time, additional earnings were credited to customers' accounts in ETH. However, on the day the dividend program ended, the funds were credited in NEXO tokens. Users receive small incentives daily.
By holding the NEXO token on the platform, users can earn higher yields on their locked cryptocurrencies. Additionally, it provides reduced borrowing and repayment rates, free withdrawals, and cashback from the exchange and purchase of digital assets. The more NEXO tokens a user holds, the more potential benefits and advantages they can unlock on the platform.
Loyalty program section on the Nexo website
NEXO tokenomics
In April 2018, NEXO's initial coin offering (ICO) raised $52.5 million in investments. The initial token price was $0.10, and the all-time high reached $4. Currently, NEXO's market capitalization is $341 million, with 560 million tokens in circulation out of a maximum supply of 1 billion coins.
NEXO tokens are distributed as follows:
- 52.5% for investors;
- 25% is held in reserve to cover overdrafts;
- 11.25% is allocated to the founders and the team;
- 6% is for rewards;
- 5.25% is for consultants, lawyers, and marketers.
In 2020, the company conducted a token buyback worth $12 million.
What makes the Nexo platform so special?
Nexo was founded in 2018 and its headquarters are located in Zug, Switzerland. It is considered the first lending platform on the cryptocurrency market. Additionally, it offers services such as cryptocurrency purchase and exchange, passive income, a crypto wallet, and a virtual card for digital assets. Nexo website says its services are used by 5 million people.
Nexo was one of the leading providers of instant crypto loans alongside BlockFi and Celsius. However, after both companies declared bankruptcy, Nexo became the dominant player on the market.
Nexo operates through smart contracts and a blockchain oracle on the Ethereum network. The company stores collateral cryptocurrencies on BitGo, Ledger, and Bakkt cold wallets.
Nexo website homepage
Nexo vs regulators
Nexo holds numerous financial licenses in various jurisdictions, including the USA, Canada, Australia, Italy, Poland, Switzerland, and others.
In 2023, however, a search was conducted at one of Nexo's offices in Bulgaria. The company is suspected of money laundering, tax evasion, and operating without a license. The platform's CEO described the allegations as absurd and law enforcement actions as a raid. The search in Bulgaria led to a 2.5% drop in the NEXO token price.
It is worth noting that this situation occurred shortly after the SEC accused the company of failing to register for trading a cryptocurrency product that the regulator deemed a security. Nexo had to pay a $45 million fine. Interestingly, the crypto lending platform planned to cease operations in the US by the end of 2022.
Who established Nexo?
The CEO and co-founder of the crypto lending platform is Kosta Kantchev, who also founded Credissimo.
Antoni Trenchev and Georgi Shulev are the other two executives of Nexo. Trenchev was previously a Bulgarian parliament member and involved in e-commerce, while Shulev worked in the investment banking sector and held the position of CEO at financial company Consestimate.
