The Future Of Instant Loan Backed By Digital Assets With Nexo

n4zriofficial (52)in #nexo2018 • 6 years ago (edited)

Scenario One

Just imagine, you have worked so hard all this while, analysing the market, collecting all of the information from a various cryptocurrencies technical analysis, write three to four post per day on Steemit and finally you have collected a significant sum of cryptocurrencies combined. You were happy but suddenly, one of your family members involved in a car accident. The doctor who treated him merely explained and you finally understood that you little brother needs a surgery which cost 20,000 USD to optimise his health status. You have been investing a significant proportion of your saving into cryptocurrencies, and now you're left with a dilemma. Should you sell 20,000 USD worth of your cryptocurrencies to pay for your brother's surgery or should you ask for a loan from any of your friend? Chances are, your friends would be reluctant to lend you such a significant amount, and a loan from any money lender's company would take some time for them to legalise the documents (not to mention their interest rate might be over the roof).

You wanted to sell your Bitcoin, so you went into the marketplace to see the current value of the cryptocurrency. The figure sits at 9000 USD per Bitcoin, that would mean you have to sell two Bitcoin to pay for the surgery, but your mind started to wonder if the price would spike up to 20,000 USD per Bitcoin next week, or next day or even a minute after you have sold your Bitcoin. That would mean a massive loss for you. What should you do?

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Scenario Two

You are an engineering student who is currently pursuing a master program in one of the top University in your country. Since you can't apply for any sponsorship because you performed poorly in the past interview session, you have to pay for a significant sum for the program. Three years back, you bought some cryptocurrencies, and now their values grow higher than ever. You tried to ask for a study loan, but you've realised the interest rate provided by the money lender's company or bank is quite steep. The academic office has issued a warning e-mail asking you to pay for a two-semester worth of study fees (let say around 50,000 USD) and now you are desperate to earn some cash so that, this financial problem would not affect your academic performance. You navigate through your crypto wallet and found that you have 75,000 USD worth of Bitcoin, "Well, that should solve my problem for now". After a moment, you started to think about the fact that you bought all these Bitcoin for 4000 USD three years ago and now the value has increased by 71,000 USD. Will it rise tomorrow?

Now, you're confused. Should I sell now or should I just take the high-interest rate study loan provided by the money lender's company?

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It's quite a dilemma if you've experienced any situation which resembled the one I've illustrated above. Afterall, more and more people started to believe in the cryptocurrency and blockchain technology's future potential in revolutionising the market. I've met with some of the people who have been regretting their decision of selling their digital asset. One of my friends in Malaysia, sold his Bitcoin when the price rate is at RM16,000 per Bitcoin. He was satisfied for a moment as he bought the crypto when the price is at RM8000 per Bitcoin, so he earns double from the amount of money he invested. However, come next week, the price shoots up to RM50,000 per Bitcoin. He was filled with regrets but what has been done cannot be undone. Oh well.

There are a few facts about digital assets which has been appointed by Antoni Trenchev, during the Fintech World Forum which are:

Digital assets are idle, they not generating any revenue.

They are not helping in any significant way towards your life's general happiness.

The liquidation process is pretty slow, inefficient and expensive (you need to pay an exchange fee and withdrawal fee).

60% of the Bitcoin wallets right now do not have an outgoing transaction (nobody enjoying the wealth provided by the crypto as they should be).

If you manage to sell your crypto, you will lose the ownership of your digital asset and the upside potential, it might hold.

You will end up paying 40% of the capital gain tax

That's a whole lot of things to process, but the point is, the amount of money you have to pay to liquidate your digital assets can be up to 40% of your overall income. That's quite expensive! This problem has inspired a group of people which is backed by Credissimo, to offer the first ever, instant crypto overdraft called Nexo (Nexobank).

Nexo can be the only solution to resolve both of the dilemmas faced by the individual in both of the scenario illustrated above. It offers an instant loan, powered by the Blockchain and Nexo Oracle technology which will allow the owner of digital assets to use any of the cryptocurrencies they have, as collateral for the loan. This means, the ownership of the digital assets would be retained and you will get instant cash transferred into your bank account or the Nexo-issued credit card.

Let's consider scenario 1; you can put your Bitcoin inside the Overdraft wallet provided by Nexo which will automatically make it as collateral to the 20,000 USD loan you're about to make. Nexo Oracle technology ( an automated algorithm system) will draft a smart contract which will provide the details regarding the loan and the future repayment process. This loan would be benefitted from the smart contract's transparency and efficiency so it would take just a few minutes to authorise any loans without considering the background profile of the loanee. The money would be available immediately in your bank account or the credit card issued by Nexo. You can finally pay the surgery without having to sell your cryptocurrency. After you've earned enough money and eventually pay the loan in full, the collateral which is your digital asset would be automatically released. You will be benefitted from the rise in the value of your digital asset if there is any. It's always yours, and there is no change in ownership as long as it is securely stored in Nexo.

All of the cryptocurrencies which are kept as collaterals would be stored securely in a fully audited Blockchain long contract and a multi-signature vault for the duration of the loan. The Nexo Oracle technology would keep track of the information regarding the loan to value ratio, the progress of the loan's repayment, the market volatility and several other factors which are important for the benefit of both sides. After collecting all of the information, it will send a notification to the borrower which will allow them to carry out certain action stipulated by the loan's contract.

Let say you want to buy a MacBook Pro which cost around 3000 USD, you can apply for an instant loan which will be secured by your digital asset and transferred into the credit card issued by Nexo. The amount of money which you can spend with this credit card would depend on the value of the cyrptocurrency which is stored in the Nexo overdraft wallet. This will allow an instant overdraft function which is offered by Nexo; you wouldn't have to get in a line and withdraw some money from the ATM anymore. The credit card, however, can only be used if the amount of loans is not substantial. If you're applying million of dollars loan, the money would be transferred into your bank account on the same day.

Any people can make a loan despite their personal background with Nexo as long as they have some digital asset to offer as collateral but some of the people which can be benefitted from this service are:

Cryptocurrency Investors
Hedge Funds
ICO and Crypto Companies
Crypto Miners
Cryptocurrency Exchanges
Gamers and Virtual Reality Users

Repayment Period

After spending the money that you have received, you will get a 45% grace period in which you wouldn't have to pay for loan's interest provided the time of repayment is within that specific period. However, we know that most of the people out there who make a loan will not be able to find the sum of money in a shorter period of time. Alternatively, you can pay a fraction of the loan per month for a certain period which we called as the instalment payment method. The maximum duration is two years.

Let say, you make a 20,000 USD loan today, and you put some of your Bitcoin into the overdraft wallet as collateral. Next week, the price of Bitcoins rise, and you've decided to pay all of the loans in one go. You can instruct the Nexobank to subtract a portion of your Bitcoin which is equivalent to the amount loan relative to the current market price. The remainder would be automatically released after the loan has been repaid.

Management Team Advisors

The project was propelled by a few veterans with years of experience in this industry.

Advisors

Managing Partnets

It will be easier for literally billions of people on the planet to spend the benefit which can be ripped from the cryptocurrency without losing their ownership on the digital asset. The amount of restriction imposed on the Nexo-issued credit card would prevent the user from overspending. Overall, the concept is great and one day, I believe, Nexo can be the future of cryptocurrency.

To more information, click the link below:

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