Quote from: Rodeo02 on October 01, 2019, 02:44:53 PM

Quote from: timerland on October 01, 2019, 01:09:06 AM

Quote from: Slow death on September 09, 2019, 07:43:19 AM

Quote from: davesmurf on September 08, 2019, 07:37:27 PM

thoughts on, https://nexo.io/ ?

is a guaranteed 8% a good thing?

Is 8% per year, wouldn't it be more beneficial for you to buy bitcoin and Hold for a year?

Not really - this logic is flawed, because your just automatically assuming that BTC is going to go up every year, which is usually not the case. We saw a huge market crash the last year, and this site is promising guaranteed returns of 8 percent a year. Just give them your money and you'll make it back.

This site doesn't actually look so bad, and I think it works off something like this.

- They raise capital via user funds, by offering pretty high rates
- They then use the funds they raised to fund safe high interest loans, that have collateral behind it.
- They make money off the spread.

Look at the stats, interest rates are capped at 8 percent a year and the credit they offer is min 8 percent. Actually seems like a pretty good idea...

IF they really use it for lending and make a high interest from borrower it is really possible for them to give 8% annual interest.
The real problem here is how secured your invesent will be. How they guaranty that your money is secured to them.

Yeah, but the issue is that their "guaranteed" investing return requires people to be constantly borrowing money from their platform.
Their collateralized loans that they are offering are probably the least risky part of the whole deal. They seem to let people borrow only 50% of the value of the collateral.
I'm guessing they would liquidate the holdings, if it got close. Just like with margin trading.

But this is the real problem:

If they had 100 BTC invested in their platform, and lent that 100 BTC back out, all good.
But what happens when people invest 100 BTC, and only 50 BTC are lent out?

They would have to charge 16% APR to meet their obligations to investors.

Or what if they only have 10 BTC worth of loans?

Then they would need to charge clients 80% APR for the loans to be able to meet that 8% "guaranteed" return for investors on the whole 100 BTC.

Guarantees are a great way to spot current, or future scams.