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Posted (edited)

I hope I posted this in the right spot, XRP is my primary hodl bag and was looking to use it together with banking services for convenience. I have looked for other (EUR) ways to get a good solid and reliable way to get some interest on my money without bunch of restrictions because my bank is getting more and more expensive and a lot more reasons for sure.

I came across a platform called Nexo. Created an account for experiences and immediately was sold.

Great interest on your EUR (and/or $) account of 8% (also on some stabilecoins, for XRP etc. interest is coming as well) and your account insured for $100M, if I am not mistaken by spelling, by Lloyd's London. There a re many benefits within the account to be found like a crypto credit line, a platform coin for a form of dividend (lol) by ratio and time (2018: 7,6% and 2019: 12,7% annual rate). PAXG is offered as well for those who are still saving for a safe but already have a computer with internet :D.
To good to be true? They are focused on lending (also based on your crypto assets) and with the usage of the Nexo coin (and the Swiss banking background and regulations in place) makes this an interesting option.

The negatives are you cant use other named accounts to transfer money, depositing salary by an employer isn't possible yet. Long waiting list for the credit card. And some other smaller issues I have to dig in. Don't get me wrong it's not perfect but by far the best thing I have seen this far for what I need.

I think this is a great option for a savings account with a form of crypto liquidity by a relatively solid fin. partner. When the interest rate on XRP goes live I will be using some coins for the annual rate if this will be in the range of the stablecoins 8% that is.
Another point is the security. I am no IT-specialist in this area but only one Authentication option and no hardware security key option yet seems to be a missed opportunity. The combination of both is way more secure (so always check when dealing with your finances, especially what YOU REALLY NEED TO DO YOURSELF, in relation to safety and security). Invest time and money for those coming in recently and unaware. Safety is relative we know now.

8% interest on my EUR account, crypto's available from my account, combining my XUMM app and so on. This is something I can really use and was waiting for it. I believe a lot of people with me.

This is in no way a promotion and/or my way to refer people to this service and always check it out thoroughly please.
Maybe I am missing something and am aware of the possible risks, so should you.

I believe I am more at risk with my current old dino bank and the insurance on my account is only 25k (backed by the government, I am paying for my own crappy insurance payout :P:spinlol:). But that's personal :) and got nothing to do with you.

This is a taste of the future imho. Liquid accounts, full of assets transferable into another in an instant, cold/hot storage by providers, investment options all in one place. If better regulations are in place, I can see these accounts becoming useful real fast (and my old dino bank falling even faster making it even more risky besides the ongoing printing press operations by the FED company).

So, my own bank? That's for you to judge. Enjoy and stay safe!

 

 

Edited by Trisky
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I hope I posted this in the right spot, XRP is my primary hodl bag and was looking to use it together with banking services for convenience. I have looked for other (EUR) ways to get a good solid and

Got started. Deposited some Xrp. Only thing I don't see is a whitelist address option for withdrawing.        

This sounds to good to be true, so I am a little wary of the “up to 5%“. I gotta do some research on nexo as soon as I am at home today! Another thing for me to consider is taxes. In my country s

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I tried NEXO small scale with EUR and was very happy. However they are quite opaque with the whole "$100M insured" thing and I am not sure which situations the insure governs and is the amount for the whole platform or your own account only? I think this part is easily misunderstood. 

Also there has been discussion in situations where you deposit your crypto and in some case, the platform has the right to "purchase" your crypto off for the market price. I personally think this is a bit far fetched to have any real backfiring effects but one thing to consider. 

I still think there's something opaque in the platform, but it has been running for some solid years now and it seems very reliable. Time will tell what could happen during very major volatility in the market or big swings in people withdrawing/depositing. But after said that I couldn't say it's more riskier than the banks are. 

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11 hours ago, Skippy said:

I tried NEXO small scale with EUR and was very happy. However they are quite opaque with the whole "$100M insured" thing and I am not sure which situations the insure governs and is the amount for the whole platform or your own account only? I think this part is easily misunderstood. 

Its a general insurance policy platform wide:
https://medium.com/nexo/nexo-is-the-only-crypto-lender-to-offer-crypto-custodian-insurance-83e3cc5bd378

11 hours ago, Skippy said:

Also there has been discussion in situations where you deposit your crypto and in some case, the platform has the right to "purchase" your crypto off for the market price. I personally think this is a bit far fetched to have any real backfiring effects but one thing to consider. 

You mean this?:

Quote

 

What happens if I don’t repay my Nexo loan?

As long as you maintain a balanced Loan-to-Value ratio or have an "Available Funds from Credit Line" with Nexo, you don't need to make any repayments. However, if the assets decrease significantly in value, you will receive a warning, stating that you should either deposit more crypto assets to your Nexo account or repay part of your loan to prevent partial automatic loan repayments.

If a borrower does neither of the above, the Nexo Oracle will initiate a partial automatic loan repayment process by selling portions of the deposited crypto assets in order to rebalance the Loan-to-Value ratio.

Sell market orders are made at the market price on leading cryptocurrency exchanges. The funds received back from the exchange will be instantly applied towards your outstanding loan balancе.

The total value of your crypto assets and the minimum amount which will trigger the small automatic loan repayments can be seen at any time below of all your crypto positions in your Nexo account.

 

I think this sounds fair and good to know indeed if it functions accordingly. I can imagine people not being happy when this is done at low prices. (However, I am not on that platform to take a loan  ;))

May I ask, because you say you tried Nexo small scale, a 'better' alternative is available?

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11 hours ago, Trisky said:

Its a general insurance policy platform wide:
https://medium.com/nexo/nexo-is-the-only-crypto-lender-to-offer-crypto-custodian-insurance-83e3cc5bd378

You mean this?:

I think this sounds fair and good to know indeed if it functions accordingly. I can imagine people not being happy when this is done at low prices. (However, I am not on that platform to take a loan  ;))

May I ask, because you say you tried Nexo small scale, a 'better' alternative is available?

I am also not planning on taking a loan, but maybe deposit XRP when they start providing interest on it. 

No better alternative, no I don't know. 

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16 minutes ago, baggy23 said:

Is someone here holding substantial amounts on the nexo platform, like several 100k USD? 

I don't really trust them because they speak about 8% interest without risk. sounds impossible.

I am not holding this amount but the remarks made by @Skippy made me ask questions @ Nexo CS.

Here is the Nexo answer on the insurance questions raised:

Quote

EURx is secured by asset-backed portfolios of overcollateralized loans. The collateral of each loan is in turn subject to custodial insurance of $100 million provided by the world’s leading audited custodian BitGo and the insurance leader Lloyd’s of London. 

All assets deposited by our clients are held in multi-signature wallets managed by BitGo who is Cryptocurrency Security Standard Level 3, as well as SOC 2 compliant, and is also backed by Goldman Sachs. Full Terms and Conditions can be checked here: https://nexo.io/earn-terms.

Therefore, you can rest assured that your funds are safe with Nexo

So if anything goes wrong and Goldman Sachs will be the next bank in line to fall, we the people will gladly inject them with some tax money. :P

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7 hours ago, baggy23 said:

the insurance for 100m $ seems a bit low... also difficult to trust a Bulgarian company with lawyer address in Switzerland.

If it goes **** up I’m in good company with @Trisky 😂 yer, got to DYOR on stuff like this, I agree but regardless people will never be satisfied 

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10 hours ago, Trentsteel said:

If it goes **** up I’m in good company with @Trisky 😂 yer, got to DYOR on stuff like this, I agree but regardless people will never be satisfied 

That's how we roll, full of risk and anti-establishment (and ending it socially together). :drinks::spinlol:

But in baggy's defence there are some (other)disadvantages discovered, with slightly less colouring to be sure .

If you have a EUR account the functionalities are more limited. Exchanging EUR to USD is not possible and having interest on USD is not possible. Or I have to buy USDT, TUSD, USDC, PAX, DAI and transfer it to my account from an exchange/service. Not as liquid as I thought beforehand.

And there are some restrictions in relation to USD <-> EUR accounts and they are not equal:

Quote

The minimum top up transfer to your Nexo Account is 1,000 for EUR or GBP, and 50,000 for USD (we aim to lower all three minimum amounts soon). For all three currencies the maximum per transfer is 2,000,000.

 

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  • 3 weeks later...
Posted (edited)

Update, unfortunately the interest rate got higher and XRP can be stored at a 5% APR now :big_boss::

More interesting perhaps is BTC and ETH coming in second/third place?

image.thumb.png.5514282b73d3f3e51d7aa7cafa31a4b2.png

Edited by Trisky
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This sounds to good to be true, so I am a little wary of the “up to 5%“. I gotta do some research on nexo as soon as I am at home today!

Another thing for me to consider is taxes. In my country selling crypto I owned for more than 12 months is tax free. If I get interest on my crypto however, I have to hold it for 10 years, before I can sell it without paying taxes on gains.

Anyway, thanks for bringing nexo to my attention!

 

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  • 3 weeks later...
Posted (edited)

I have a considerable position on Nexo. I experienced their liquidation oracle first-hand, it is fair and reasonable actually.

Their insurance with Lloyd's of London is tied to their cold storage arrangement with Bitgo. Ah I see you already have that above.

You can get in interest deduction on loans APR if you hold the Nexo token as part of your portfolio on the netowrk, and there is supposedly a dividend that gets paid out - for US citizens the Nexo token is one of the few dividend paying tokens approved by the SEC - they filed a 506 and so accredited investors were allowed to buy during the ICO but after the allotted holding term they were free to sell the token on the open market and buyer can receive dividends without fear of reprisal. That is just my understanding - I have no legal credentials about this and it is not legal advise.

Nexo provided a lot of transparency during the whole Mar 12-13th debacle because many people got liquidated due to overleveraging. Nexo felt the need to explain why they could not provide a time or funding buffer for liquidations in order to protect the funds and returns of depositors.

There are discord and telegram messages that describe more of this in detail.

I was pulling credit on pumps, buying back in and reinvesting on dumps. I'm not against the method actually, but there is always the risk of what, a 70-80% drawdown? Under normal circumstances it is interesting - but not recommended for anyone who is risk averse.

Had I not reinvested I could have easily been liquidated more heavily. I didn't realize at the time that the best way to secure my collateral during those downturns would have been in deposit stablecoins - up until that situation I had never really understood their utility. Now I see that in the world of defi stablecoin balances are an essential and valuable hedging instrument. So I got partially liquidated at a loss, that will come in handy at tax time I suppose to offset gains made later this year perhaps. Hard to say.

I have not looked too deeply into their more recent crypto depositor returns, but I can say that they do not fractionalize their stablecoin depositor holdings or rehypothecate as far as I can tell - it is a stricter lending platform, but that means you have less of a buffer for sharper market volatility. There are no circuit breakers on the platform. Everything is operated by the oracles and the smart contracts in real time.

Those real time smart contracts limit the channels a person has for appeals. Something very important to consider if you are used to having the ability to negotiate with traders or brokers. The defi world runs on rules that tend to be more rigid than the life circumstances we often find ourselves subject to.

It's an important thing to consider when getting into defi. It's worth having a realistic assessment of the risk your own personal life circumstances pose - as well as the fragility of the markets - because in the end there isn't really an appeal for acts of God or poor planning.

That doesn't mean these companies will not work with you under extreme circumstances - my experience is that under some circumstances they can provide options - but these are a private matter that they ask not to disclose. It is an exception, not the rule.

Edited by jag216
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