Investing in Nexo. Is it worth it?

[IntelligentPersonVS]

So, I currently found out that Nexo is giving you 5% interest on BTC and 10% on stablecoins. What is the guarantee that some day (in 3 or 10 years) they won`t say you "no soup for ya today, mate, have a nice day"?
Or, if they would wish to pay but cryptocoins fall so low that they just wouldn`t be able to pay, even if they want (crypto world isn`t stable, not a news)
Even banks with 150+ years of history (Lehman Brothers) time from time go bankrupt
What do you think about it?

[TryNinja]

What is the guarantee that some day (in 3 or 10 years) they won`t say you "no soup for ya today, mate, have a nice day"?

None. "Not your keys, not your coins".

I started trying their competitor (Celsius Network) last Saturday and deposited some USDC to it (they also offer higher interest rate than Nexo). There are many things that could go wrong (hacks, exit scam, insolvency, etc...).

You probably know how they can offer those rates, right? They lend money and ask for high collaterals to keep everything covered in case the borrower runs with the money. I'm not aware what Nexo did when BTC crashed earlier this year, so that's probably something you want to search about. I know that (at least for Celsius) it seems like they still managed to keep their business going and process any withdrawal.

Nexo also had a data breach a few months ago, where hackers "got hold of a marketing database with personal data of the users", so keep that in mind. Fortunately, this - supposedly - didn't include any passwords or direct access to the coins.

You have the risk of: the company being hacked (partially mitigated with BitGo's insurance); running with the money; losing your money. It's up to you to see if the rate is worth the risk. Does the company have good security practices? How do they lend the money? How do they handle the big crashes? etc...

And of course, if you want to try out Celsius instead, PM me. I have a ref link which gives both of us $20 (not saying it's better or safer).

edit:
Found an old discussion about Nexo which became active recently. Take a look at it: https://bitcointalk.org/index.php?topic=5160150.0

[carlfebz2]

So, I currently found out that Nexo is giving you 5% interest on BTC and 10% on stablecoins. What is the guarantee that some day (in 3 or 10 years) they won`t say you "no soup for ya today, mate, have a nice day"?
Or, if they would wish to pay but cryptocoins fall so low that they just wouldn`t be able to pay, even if they want (crypto world isn`t stable, not a news)
Even banks with 150+ years of history (Lehman Brothers) time from time go bankrupt
What do you think about it?

Your choice but those solid points above had already mentioned out that there would be always accompanied with risk and hell, would you really be willing on handling out your funds just for you to earn 5% interest?
It isnt really worth imho.

I had never considered this kind of option on where i do put up my assets into these platforms just for me to gain a little out of it which it can really be attain on just simply holding up those
coins into your own wallet.

Well, its your coins then its your own decision.Im aware with Nexo and so as with Celsius. Just a reminder on not to put it all in case you do consider on proceeding on.

[JeromeTash]

What you should ask yourself is that, is it worth it to risk lets say 1 BTC for just 15% profit over given period of time. If you have all the time in the world just do less risky trades like buying Bitcoin when it dumps and sell when it pumps (Someone who bought BTC towards the end of March this year has already multiplied their capital X2 if they decided to sell off 4 months later today), now that's how worthy the risk for my capital would be rather than wait for a year for just 15% profit.

[IntelligentPersonVS]

What are you thoughts on it?
https://ibb.co/7z8Nvx1
They claim their 100 million (impressive sum) guarantees

[LTU_btc]

When you make such investments, you always should accept all possible risks. As said above - not your keys, not your coins, so you never know what can happen.
5% yearly interest isn't that, considering all possible risks. There is rule in investment - don't invest more than you afford to loose. But if you will put small amount of BTC there, your profit will be very insignificant. To earn significant interest you have to put big number of BTC, maybe all your holdings. And obviously, it increase risk.

[IntelligentPersonVS]

When you make such investments, you always should accept all possible risks. As said above - not your keys, not your coins, so you never know what can happen.
5% yearly interest isn't that, considering all possible risks. There is rule in investment - don't invest more than you afford to loose. But if you will put small amount of BTC there, your profit will be very insignificant. To earn significant interest you have to put big number of BTC, maybe all your holdings. And obviously, it increase risk.

10% on EUR. Inflation of euros is 1-2% per year. So, 8% is a clear profit. Some stable businesses profit less than 8, in addition they have some risks, but here, no risks, because of "100 millions guarantees". Interesting. Another long running Ponzi scheme?

[TryNinja]

They claim their 100 million (impressive sum) guarantees

That's because they hold their coins with BitGo. But that doesn't mean your coins will be covered if anything happens. All BitGo does is guarantee that in case they get hacked, Nexo gets the coins back.

However, if Nexo does bad business decisions or they themselves get hacked (with hacker somehow withdrawing the money from their own system), there is no $100m coverage. In that case, you could only hope Nexo does the right thing and somehow can cover the losses.

[IntelligentPersonVS]

They claim their 100 million (impressive sum) guarantees

That's because they hold their coins with BitGo. But that doesn't mean your coins will be covered if anything happens. All BitGo does is guarantee that in case they get hacked, Nexo gets the coins back.

However, if Nexo does bad business decisions or they themselves get hacked (with hacker somehow withdrawing the money FROM their system), there is no $100m coverage. In that case, you could only hope Nexo does the right thing and somehow can cover the losses.

So, in regard to clients, how this guarantees of 100millions can assure me? In which cases, in theory, I can be paid by this fund?
I`m pretty aware of shit that may happen, especially through Internet, when no one would do even a thing to someone who broke the law.
But, if they claim, then they have to follow their statements, if they have a license of real authorities

[TryNinja]

So, in regard to clients, how this guarantees of 100millions can assure me? In which cases, in theory, I can be paid by this fund?

BitGo (where Nexo holds their coins) got hacked? They give the money back to Nexo. And if you are a client, part of that money is yours.

That's literally all.

[IntelligentPersonVS]

So, in regard to clients, how this guarantees of 100millions can assure me? In which cases, in theory, I can be paid by this fund?

BitGo (where Nexo holds their coins) got hacked? They give the money back to Nexo. And if you are a client, part of that money is yours.

That's literally all.

What if Nexo just would buy a passport of Panama and say "adios, losers"? Would BitGo cover the losses?

[TryNinja]

What if Nexo just would buy a passport of Panama and say "adios, losers"? Would BitGo cover the losses?

BitGo only covers their own breaches.

If Nexo exit scams, you lose money.
If Nexo gets hacked, you lose money.
If Nexo's employee withdrawals all the money, you lose money.

What if BitGo gets hacked? Nexo holds their coins with BitGo, so they would lose everything, including their user's coins (like yours). However, since BitGo has insurance, they return the coins to Nexo.

If BitGo gets hacked, they will give the coins back to Nexo. But if Nexo wants to scam you, you still lose money. Those coins are insured for Nexo, not you.

[IntelligentPersonVS]

What if Nexo just would buy a passport of Panama and say "adios, losers"? Would BitGo cover the losses?

BitGo only covers their own breaches.

If Nexo exit scams, you lose money.
If Nexo gets hacked, you lose money.
If Nexo's employer withdrawals all the money, you lose money.

What if BitGo gets hacked? Nexo holds their coins with BitGo, so they would lose everything, including their user's coins (like yours). However, since BitGo has insurance, they return the coins to Nexo.

If BitGo gets hacked, they will gives the coins back to Nexo. But if Nexo decides wants to scam you, you still lose money. Those coins are insured for Nexo, not you.

Interestingly enough what would Nexo say about it. I`ve seen so many scams via my life, the only question is when and how
But here, the situation is different. They don`t offer enormous return (only 5-10% per year), at the same time there are couple of stable coins that don`t inflate higher than proposed interest.
So, personally, they don`t have a technical reason to scum, at the same time the question remains how will they maintain stability of work over time

Then they have to cooperate with real banks, putting money in real economy and be regulated by real institutions. Interest paid arent`t that big, so if their work is executed properly, then I personally think it is possible to work for a long term. But, there is another question: be or not to be (scum or not scum)? What is the reason to work, if you can just easily and effortlessly quit with money

[anu1908]

long story short using third-party services means sacrificing some security for convenience. regardless of who you choose you can only minimize the risk, so if the profit is bigger than the risk (based on your calculation) then go for it. compare it with compound, etc where you can withdraw your coin anytime as long as the pool is not empty, to get a broader perspective. 5-10 per year is of course not that scammy, but many things could go wrong with leaving your coins on a stranger wallet.

personally, i will use compound/instadapp, or find an lpos coins that gives good return and stake with one of the node instead of using nexo.

[malevolent]

What if BitGo gets hacked? Nexo holds their coins with BitGo, so they would lose everything, including their user's coins (like yours). However, since BitGo has insurance, they return the coins to Nexo.

If BitGo gets hacked, they will give the coins back to Nexo.

I wonder what's the biggest amount of stolen or otherwise lost bitcoins that was covered by some sort of insurance and where the insurance company actually covered the losses. I can't find anything approaching anything close to the $100M that BitGo claims to be insured for, for example.

[joniboini]

Can't find the news too. Most news are just PR released to inform public that this or that company has launched a crypto insurance funds that is used by an exchange. Maybe the claim process itself takes very long and require lots of data and time to manage, hence why there's no news.

Pretty sure there will be one or two news covering a class-action if those insurance companies & exchanges did not do what they're supposed to do.