Post
Topic
Board Service Discussion
Re: https://nexo.io/ ?
by
timerland
on 02/10/2019, 03:08:06 UTC
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.
I'm pretty sure the borrower needs to put down collateral for their loans (they give out fiat money for your crypto, it looks like), so if the borrower defaults, nexo will just keep or liquidate the cryptocurrency - this is probably one of the safest lending options I've seen (assuming they don't go scam).

The real problem is with shaw1. How are they going to keep getting enough loans to be able to offer such high interest rates to the lenders? Surely they close their investment options at some point?