Nexo - "Earn 8% dividend a year with no risks"

[AdolfinWolf]

See this article below which explains it:

 https://medium.com/nexo/earn-interest-and-protect-your-stablecoins-with-nexos-1-to-1-conversion-guarantee-dbdefa8a8152

So basically, you deposit your crypto, convert it to some shitty stable coin of them, and earn 8% interest on a yearly basis. They say they use them for loans or something? aaaand they're 1:1 backed.. ?

Hmm. Seems too good to be true other than the fact that your "gains" are measured in USD/EUR ofcourse, and not BTC. For now it seems that you can't earn interest on BTC (it says "Coming Soon".)

Is anyone using them? I've heard of them in the past for getting loans, but not this compound interest scheme. Might be interesting if it's legit.

[mk4]

While there might be seemingly legitimate ones like probably BlockFi and Celsius Network, I've never found these services worth the risk. Regardless of how high the percentage dividends are, handing over your Bitcoin to a centralized entity especially for long periods of time is a big no for me. Heck, just thinking of it makes me feel uneasy.

While 8% sounds really good, it's suspiciously quite high though.

[OmegaStarScream]

You can find some testimonials of people who used them on the website (linking to Twitter) and with the money they are putting on marketing, I won't be surprised If the statistics on their website regarding the users, etc.. are accurate as I've seen them being advertised on Facebook, CoinMarketCap, Etherscan, and some other big sites. Personally though, I wouldn't suggest the service to anyone simply because of the irreversible nature of cryptocurrencies. This is no different from exchanges controlling your private keys, I don't see why would anyone want to risk their funds... there is always a possibility of inside jobs, hacks, etc.

[TheUltraElite]

While 8% sounds really good, it's suspiciously quite high though.

Its 8% per year. Actually its only 6.5% per year. Thats like regular bank accounts.

So thats a pretty small amount considering the risk that you are taking to put your asset into a third party lending platform and allowing them to lend it to users. It might seem lucrative as a source of passive income - let your money grow but most of the time it ends up with problems since here on the internet nobody is going to investigate properly and judge in case a theft of funds happen. These sections are grey enough to allow shady companies to take advantage.

Nonetheless, I am not saying that NEXO is a scam, but I would tread carefully with my coins. I prefer to look them with me rather than invest them. But those who want to take risk are free to do so. Let them judge the level of security measure that NEXO takes.
Offtopic: What happened to SALT Lending? I heard some rumors that SALT was liquidated into NEXO from some sources which I am not sure if they are conspiracy theories without proof or true.

[Tipstar]

They are calling it a 8% but I'm only getting 6.5% of interest on my wallet. Their interest rate is less than the immediate competitor Celsius but they provide much greater flexibility on deposit and withdrawal. Not stated as such but the Celsius wallet is more like a fixed deposit than a normal deposit account.

[AdolfinWolf]

They are calling it a 8% but I'm only getting 6.5% of interest on my wallet. Their interest rate is less than the immediate competitor Celsius but they provide much greater flexibility on deposit and withdrawal. Not stated as such but the Celsius wallet is more like a fixed deposit than a normal deposit account.

Looking at Celsius; do they let you earn interest on your BTC, or do you need to convert your BTC to USD and then you earn interest on USD?

Looks like you can earn interest on BTC, which could be much better than Nexo (since there you convert your BTC into USD before you can earn interest.)
But; i agree, all  of these companies look pretty shady to me, and perhaps it's not worth the risk at all.

Do you use them? (Celsius that is.) I'm reading their FAQ and i'm kind of dumbfounded...

Our business model does not account for compounding interest – we’d rather give you the highest rates possible, always! Compounded interest is simply not a sustainable business model at this time.

What does that mean; after a year i can't reinvest my interest? huh? Interest is deposited every other week. HUH?

So, why wouldn't i withdraw the interest + my deposit, then redeposit all of it? I don't get it.


I don't really completely understand these business models either, which i guess i should.
>https://celsius.network/borrow-dollars-using-crypto-as-collateral/
For 1 BTC, you can loan 5600; so 2:1, against a 9% yearly interest.
Why would anybody do this?

[LeGaulois]

Interest payments are based on cryptos, there are no interest payments in dollars. And if you choose to receive the interests in CEL (the Celsius token) the percentage is higher. But if I'm correct borrowers can get a loan with USD as collateral too instead coins

Interest is deposited every other week

No, that's why they explained there is no compounding interest


Anybody noticed the *
"Interest rates are subject to change". What does it mean? It means you can borrow $50,000 with 8% rate but 6 months later wake up a morning and discover the rate changed to 20%

[DebitMe]

100% a scam and will fail. They will not be able to find enough people paying over 8% interest for loans that will not default to possibly keep this up for that long.

[AdolfinWolf]

Interest payments are based on cryptos, there are no interest payments in dollars. And if you choose to receive the interests in CEL (the Celsius token) the percentage is higher. But if I'm correct borrowers can get a loan with USD as collateral too instead coins

Interest is deposited every other week

No, that's why they explained there is no compounding interest

So you can't withdraw your interest, only after how much time? but it does get deposited into your account every week? ...

If it doesnt' compound why not just give it every X months, when you can instantly withdraw it and redeposit it to make it compound... ?... I don't get it. this seems flawed.

[LeGaulois]

Interest payments are based on cryptos, there are no interest payments in dollars. And if you choose to receive the interests in CEL (the Celsius token) the percentage is higher. But if I'm correct borrowers can get a loan with USD as collateral too instead coins

Interest is deposited every other week

No, that's why they explained there is no compounding interest

So you can't withdraw your interest, only after how much time? but it does get deposited into your account every week? ...

If it doesnt' compound why not just give it every X months, when you can instantly withdraw it and redeposit it to make it compound... ?... I don't get it.

The average investor doesn't want to receive profits every month, too long.  It's acceptable if it's your bank, but when dealing with an enterprise like this one it's different. Yes, the payment interests are credited every week. Sure you can compound yourself the interest but it doesn't worth to go 100% compounding, unless we're talking about xxxx$ weekly in interest.

[shield132]

Even banks carry some risks so if anyone says it's investment without any risk, he/she is in mistake from the very first because doesn't matter how they acquire profit, loans carry a lot of risks too.
Maybe they are safe but don't know why you have to wait years for 6.5% profit (that number is stated in article instead of 8 as it's on thread's title). I think investor who waits for 6% guaranteed profit isn't good one and if you have a lot of money, better to invest in business, fund startups and etc.
How much profit (max) can you get if you live in usa and deposit in bank?

[gentlemand]

Interesting that they're guaranteeing a 1-1 dollar redemption for all stablecoins. There've been cases of the issuers themselves refusing to redeem coins. Sometimes it's compliance, sometimes because it 'makes us look bad' on Coinmarketcap. And there's good old Tether of course.

https://www.coindesk.com/winklevoss-crypto-gemini-gusd-stablecoin-redemption

How can this third party company guarantee it for everyone?

[LeGaulois]

Even banks carry some risks so if anyone says it's investment without any risk, he/she is in mistake from the very first because doesn't matter how they acquire profit, loans carry a lot of risks too.
Maybe they are safe but don't know why you have to wait years for 6.5% profit (that number is stated in article instead of 8 as it's on thread's title). I think investor who waits for 6% guaranteed profit isn't good one and if you have a lot of money, better to invest in business, fund startups and etc.
How much profit (max) can you get if you live in usa and deposit in bank?

Banks don't take a risk. The entity taking the risk is the loan insurance issuer. Because you when you borrow money there is insurance for the bank in case you don't pay or become disabled, ect. You don't understand what is weekly, monthly, or P.A.? Do you have a bank account at least? 6% can be considered as a decent rate, considering banks offer ~1%

[stompix]

Interesting that they're guaranteeing a 1-1 dollar redemption for all stablecoins. There've been cases of the issuers themselves refusing to redeem coins.
How can this third party company guarantee it for everyone?

Of course, they can't.

I'm looking at the graph of their token (of course they had an ICO)and it's all over the place

All-Time High   $0.539466 USD (May 07, 2018)
All-Time Low   $0.043333 USD (Sep 12, 2018)

At least they are still 7% up from the moment of the ICO, but comparing to Bitcoin it's -30% down.
Celsius is even worse, down 70% alone vs the USD.

Anyhow, I never understood those types of lending websites.
So I deposit 100k$ worth of Bitcoin to some foreign business, take a loan of 50k on which I pay interest two times as much as my bank offers because...
Just for the thrill of seeing if I can get back my collateral after I repay the loan or they went "bankrupt" a day before?

[LTU_btc]

Interesting. I've never tried any of these lending platforms, but I'm going to check this one. 6.5% a year doesn't sounds bad, but I'm not sure that's worth considering all risks. Now matter how legit these platforms looks, it's hard to trust them with my money in long term. But maybe I'm going to try it with small investment. Does anyone knows how much minimal is needed to start?

Its 8% per year. Actually its only 6.5% per year. Thats like regular bank accounts.

I don't know where do you live, but I would be happy if banks in my country would pay such interest. In my country banks paying less than 1%. For example my bank paying 0.05% interest what is ridiculous...

[AdolfinWolf]

Interesting that they're guaranteeing a 1-1 dollar redemption for all stablecoins. There've been cases of the issuers themselves refusing to redeem coins.
How can this third party company guarantee it for everyone?

Of course, they can't.

I'm looking at the graph of their token (of course they had an ICO)and it's all over the place

All-Time High   $0.539466 USD (May 07, 2018)
All-Time Low   $0.043333 USD (Sep 12, 2018)

At least they are still 7% up from the moment of the ICO, but comparing to Bitcoin it's -30% down.
Celsius is even worse, down 70% alone vs the USD.

Isn't their insurance for when they potentially go bust, and not necessarily guaranteeing the price of their little shitscoin?

Anyhow, I never understood those types of lending websites.
So I deposit 100k$ worth of Bitcoin to some foreign business, take a loan of 50k on which I pay interest two times as much as my bank offers because...
Just for the thrill of seeing if I can get back my collateral after I repay the loan or they went "bankrupt" a day before?

Which is why i wonder if this isn't some sort of  a giant ponzi scheme, but apparently Nexo  (https://support.nexo.io/hc/en-us/articles/360017628093-Security-and-Insurance)  is insured by Bitgo, https://www.bitgo.com/resources/insurance

And so i don't expect them to hold funds of what they can confirm is a ponzi scheme. Idk.

I don't know where do you live, but I would be happy if banks in my country would pay such interest. In my country banks paying less than 1%. For example my bank paying 0.05% interest what is ridiculous...

Yep. I'm not sure where you're from that banks pay 6.5% interest, but that really takes me back to '08. Can't be real.

Interesting. I've never tried any of these lending platforms, but I'm going to check this one. 6.5% a year doesn't sounds bad, but I'm not sure that's worth considering all risks. Now matter how legit these platforms looks, it's hard to trust them with my money in long term. But maybe I'm going to try it with small investment. Does anyone knows how much minimal is needed to start?

Nexo has no minimum amount, and Celsius probably doesn't either. Everybody's welcome !  


Apparently BlockFi also lets you earn 6.2% interest (min of 0.5BTC)
https://blockfi.com/crypto-interest-account/

They seem to have been in the business a bit longer and allow you to use BTC instead of whatever shitcoin nexo uses?
Looks a bit more interesting.

[malevolent]

6.5% per year is way too low for the risks involved in letting someone store your coins and the likelihood of a hack, inside job or an exit-scam.

Do you have a bank account at least? 6% can be considered as a decent rate, considering banks offer ~1%

Yep. I'm not sure where you're from that banks pay 6.5% interest, but that really takes me back to '08. Can't be real.

There are tonnes of countries that will pay 5-10%, some will pay 15% or more:

https://www.reinisfischer.com/highest-deposit-rates-world-country-2018
https://www.financialadvisory.com/world-deposit-rates.html

There are several caveats, however, namely:

1. they accept deposits in exotic currencies whose inflation rates might be high;
2. which is not a problem if they pay well above the inflation rates;
3. but it might be a problem if the country is corrupt, unstable, sanctioned or in the midst of a civil war;
4. there might be capital controls
5. some of them may even pay well for USD deposits, but points 3. and 4. still apply;

IOW, caveat emptor

[stompix]

There are tonnes of countries that will pay 5-10%, some will pay 15% or more:

https://www.reinisfischer.com/highest-deposit-rates-world-country-2018
https://www.financialadvisory.com/world-deposit-rates.html

But those rates as you've said are for their currency, the rates at those lending services are for $.
So it would make a lot of sense for a guy holding Turkish lira to consider it as an investment but ..taking a loan?
Not only you have to deal with the inflation but with the rates also.

Imagine somebody from Venezuela trying to pay a loan in USD, he must earn each month twice as he did previous

Which again bring the question, why would anybody take a loan from those guys?

~
Which is why i wonder if this isn't some sort of  a giant ponzi scheme, but apparently Nexo  (https://support.nexo.io/hc/en-us/articles/360017628093-Security-and-Insurance)  is insured by Bitgo, https://www.bitgo.com/resources/insurance

And so i don't expect them to hold funds of what they can confirm is a ponzi scheme. Idk.

Means zero to me. Remember Madoff?  Why would you trust Bitgo? Just because some big names have invested in it?
I know tens of so-called unicorns that received millions in backing from big names just to go bankrupt in under a year.

Ps.
This is not directed at you,  , just something I've seen on this forum lately.
When some sort of banks like start-ups appear, if they deal in crypto, people are immediately starting to clap their hands, even if the business is started by GS or others, and at the same time, they boo the same banks that own that business.

It's like sticking a logo on a rag. if it says Cavalli, it's instantly not a rag, it's the new ultra elite exclusive fashion line.

[LeGaulois]

I checked the rate on deposits. Wow, 15%-20% even with inflation it's a nice rate, but I doubt it can be a stable scheme unless the bank itself is truly making 30-40% p.a. lol.

Here, for the simplest plan (the most popular) is giving 0.75%. Ridiculous. You invest $10k you get $75. Seriously? I would rather buy some cheap gold coins and get a double rate.
The 2nd most popular is giving between ~1,5% to 2.5% (depending on how you spread the funds) but your capital can lose value, so.
Mutual funds in real estate are giving ~5%

I prefer to look at some crowdfunding platforms, I'm looking into 1 currently, focusing only in real estate, they can give 8%-10% yearly based on a 12 or 24 months contract. Yes, there is a risk too, but it's smaller than a fall in the real estate market. Here the risk is that the borrower does not repay. But their clients are small real estate companies, not individuals it's lower the risk. (And adding that they're very very selective to accept a new client...)

6% I could take the risk if I'm sure people can basically withdraw their initial investment at any time. Just a matter to spread the risks.

[msarro]

Most of this thread is about depositing crypto and earning interest
But I am more interested in their newer program Earn 8% Interest on EUR (fiat) Nexo website, Medium article
Is anyone using that? I have some fiat sitting at the bank and I'm getting almost zero interest, even if I locked it for 12 months, I would get only like 1% interest. So Nexo's 8% interest per year program looks perfect for me. It also says I can withdraw anytime which is good because I have this fiat for emergency for example if my car breaks and I need to buy a new one in short time.
But is the risk worth it? I only heard about Nexo recently but they seem pretty legit to me.