First Thoughts on Nexo

Crypto has been proven to be a little too slow and not user friendly for the masses. Maybe finance is the bigger world killer-app. Of those solutions, all very much in the early innings of development, I’m intrigued by Nexo.

Nexo is a lending platform whose ownership is in ethererum tokens. It is supposedly SEC-compliant for dividend issuance. This is supposed to represent 30% of the profits of the lending organization.

Unlike virtually every other bank however, Nexo’s volume can be tracked almost in real time on Nexostatistics.com. There loan amounts and originations on the Nexo platform can be seen, and I’ve marked the two dividends issued. Future dividends have not been scheduled, but this should be promising. (The total eligible token number is also not clear. To be eligible, you must register.)

Nexo has an active Medium account which covers the dividend policies here. The killer app, though available in different forms elsewhere, is crypto-as-collateral. The loans are therefore instant.

The price has doubled or so this year, like other tokens, but still doesn’t appear to be reflecting the real world use. The lack of availability on major platforms, and need for KYC registration on Nexo to get the dividend makes for some illiquidity that must be reflected in the price.

The market cap is now around $124 million, with a $0.22/token price. The last dividend was $2.4 million.

Any banking scheme can blow up — indeed, most do in time. How much of an advantage will being an early mover be? Loans against crypto feels like a commodity, but the real world crossover is something Nexo appears to have managed. Nexo (alongside the Basic Attention Token) is one of the few tokens whose real world use can be seen and tracked. I’m very interested in this.

The tokens are harder to come by: for US residents, Changelly is the best way, but you should set up your Nexo wallet first.

A strategy of buying bitcoin for Nexo, then taking a loan (50% LTV possible now) for Nexo tokens is an interesting highly leveraged way to play any bitcoin boom.