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Nexo is a centralized finance platform that primarily focuses on crypto borrowing services.
What is Nexo? (NEXO)

Centralized finance (CeFi) has played a big role in onboarding the public to the digital assets space. CeFi entities have wide-reaching and variable goals. They include everything from exchanges like Bitstamp to hybrid efforts like Crypto.com and borrowing/lending services.

Nexo is a CeFi platform that offers multiple services, ranging from buying crypto with fiat currencies to swapping tokens. However, it is most well-known for its service that allows users to take out crypto-backed loans. Nexo’s focus on digital asset borrowing allowed it to issue over $7 billion in lines of credit to its users between 2018 and 2023. It has also worked to insure the assets on its platforms through custodian partners and undergoes regular audits—important measures in the eyes of crypto users after the downfalls of CeFi lending brethren Celsius and BlockFi.

The platform issues NEXO, an Ethereum-based token that rewards holders with perks like crypto rewards, discounted trading, and preferred interest rates for borrowing, based on a multi-tiered loyalty program.

What is the history of Nexo?

Nexo was founded by Antoni Trenchev, Georgi Shulev, and Kalin Metodiev. It was launched in 2018 with the financial backing of Michael Arrington, the founder of TechCrunch.

Although the platform boasts more than 6 million global users and more than $100 billion in processed funds, it has also faced its share of adversity throughout its years. In fact, Nexo was one of many entities that proposed to buy assets from Celsius when the competing CeFi lender was beginning to wind down operations. Then, in August 2022 the company took one of its co-founders (Shulev) to court for issues related to a settlement agreement.

Despite these obstacles, Nexo’s biggest trial has been increasing regulatory scrutiny, which has led to legal action restricting the company’s operations in certain jurisdictions. In January 2023, Bulgarian officials raided Nexo’s offices in the country’s capital city, reportedly due to suspected money laundering and tax crimes. Later that month, the US Securities and Exchange Commission (SEC) announced Nexo would pay $45 million in penalties and cease operation of its Earn product in the country, which the regulatory body considered an unregistered security.

As a result of these challenges, the company has had to pare back its services in some countries and restructure its operations, which included dissolving some of its efforts in the United Kingdom in May 2023.

How does Nexo work?

Nexo is run by a company with its own interests and full control of the platform. Although many crypto users tout the benefits of decentralization, this centralized structure allows Nexo to conform to regulations and register with necessary governing bodies, thus establishing itself on a clearer legal ground.

For instance, it is registered as a money service business with the US Financial Crimes Enforcement Network (FinCEN), is considered a virtual currency operator through Italy’s Organismo Agenti e Mediatori (OAM), and holds licenses as both a money transmitter and lender in multiple US states. Being centralized also allows Nexo to undergo regular audits of its reserves, insure its assets, and build relationships with others in the industry for purposes of crypto custody and more.

Borrowing on Nexo

One of Nexo’s most prominent and widely-used features is the ability to take out crypto-backed loans. In doing so, users are able to put their crypto to work as collateral for borrowed funds—either in fiat or stablecoins—and can use these funds for any number of purposes. Loans are overcollateralized (meaning the value of assets is backing loans is always higher than the loans themselves are worth) so there is no risk of default.

Cryptocurrencies have differing loan-to-value (LTV) ratios. As an example, if you hold NEXO (LTV 15%) you can borrow up to 15% of the value of NEXO in your account, but you may be able to borrow up to 90% of the value of a stablecoin like UDSC you hold (LTV 90%). This is a function of the volatility of the crypto market.

Nexo allows users to “top up” the crypto in their account in order to meet the required amount of capital that backs these loans. Additionally, these loans have varying rates of interest based on which loyalty tier users fall into (see below). For Platinum users, the borrowing rate can be as low as 0% as long as they keep their LTV ratio under 20% (meaning their loans account for < 20% of total portfolio value).

Loyalty program tiers

Nexo’s loyalty program is one main driver of use (and value) of its NEXO token. The more NEXO a user holds, the more they can benefit from advantaged features of the platform. This includes better interest rates for borrowing, cashback from each trade on the platform, free withdrawals of crypto to external wallets, higher rewards from the Nexo Card, and higher interest accounts for held cryptocurrencies in some jurisdictions through Nexo Earn. The Base tier is for users who have < 1% NEXO in their portfolio, Silver is 1-5%, Gold is 5-10%, and Platinum is 10% or more.

Although some of these numbers are subject to change, generally Nexo’s tiers include Base, Silver, Gold, and Platinum and in July 2023 came with the following features:


Base (<1% NEXO) 

Silver (1-5%) 

Gold (5-10%) 

Platinum (10% +) 

Borrowing rates 





Exchange cashback 





Earn rewards* 

8% / 12% 

8.5% / 12.5% 

10% / 14% 

12% / 16% 

Card rewards** 

0.5% / 0.1% 

0.7% / 0.2% 

1% / 0.3% 

2% / 0.5% 

Free crypto withdrawals 





*first number is stablecoin rate of interest, second is the maximum interest for crypto; only available in certain jurisdictions (e.g. not the US or Canada)

**first number is rewards in NEXO, second is rewards in BTC

Other select products

  • Buying crypto with fiat – Nexo supports buying crypto with credit or debit cards, which has served as a way to onboard fiat for crypto.
  • Nexo Card – Like a regular credit card, the Nexo Card represents a line of credit from which borrowers can use to buy items. When they do so, they use their crypto-backed loan without “spending” the crypto used as collateral. The card comes with variable rates of rewards for purchases.
  • Swapping and trading crypto – Nexo is connected with multiple sources of liquidity across the crypto asset market, including centralized exchanges and market makers. This allows users to trade between coins/tokens quickly and easily, and Nexo does not charge trading fees. Some traders can also use Nexo’s “Pro” trading interface for more advanced functionality and also use up to 3x trading leverage.
  • Nexo Earn – Although this is not available everywhere (e.g. not in the US), Nexo offers users the ability to earn interest on their holdings on the platform. Interest is paid out daily, and users enjoy a slight advantage if they opt to receive their interest in NEXO.
  • Staking – Because Nexo is an Ethereum validator, it can offer staking services to certain users (again, not in the US, Australia, or Canada). By converting ETH to NETH (Nexo-based ETH), users can generate yield on their funds while also earning interest through Nexo, even if they are using NETH as collateral for a loan.

How is the NEXO token used?

When Nexo introduced its “NEXO Dividend Token” (the formal name for NEXO) in 2018, the company highlighted that this was different than many other crypto projects’ tokens. NEXO was designed to be an SEC-compliant dividend-paying asset-backed security token with utility features. It is an Ethereum-based token that conforms to the ERC-20 standard.

At launch, NEXO was designed to help fund crypto-backed loans and incentivize use of the Nexo platform, and 30% of the company’s profits were to be shared with NEXO token holders. NEXO holders have received multiple dividend payouts by owning the token, including one totaling over $20 million in 2021. However, after this dividend the Nexo community voted to continue profit-sharing through daily interest for NEXO holders, rather than as lump-sum dividends.

Otherwise, Nexo users can hold the token in their account to unlock certain perks according to the platform’s loyalty program. This is similar to how other exchange-based tokens work (e.g. CRO, KCS, HT). More details can be found above, but user benefits are tiered by how many NEXO tokens users hold and include: discounted borrowing rates, increased rewards for each asset swap, and the number of fee-free crypto withdrawals. NEXO can also be used to pay platform trading fees, which grants a discounted rate compared with paying by other means.

Finally, the token has been used by the company to take votes on governance proposals to decide on how to direct platform efforts. However, this mechanism has been implemented only as a way to take the temperature of the Nexo user base, and it should not be confused with the operations of a decentralized autonomous organization (DAO) that has more direct control over a project’s development.

Token distribution

There is a maximum supply of 1 billion NEXO. Of these, 52.5% were reserved for investors in the NEXO token sale, 25% were allocated to overdraft funding reserved, 11.25% were given to the founders and team, 6% were dedicated to community building/airdrops, and 5.25% were allocated to advisors/legal/public relations.

Nexo essentials

  • Nexo is a platform that offers a number of centralized finance solutions including buying crypto with fiat, swapping coins/tokens, and crypto-backed loans.
  • The company was founded in 2018 and has achieved notable success as a CeFi lender, but it has also faced increasing regulatory scrutiny that has limited its offerings in some countries.
  • The NEXO token is used to dictate varying levels of platform benefits for users through loyalty tiers.

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