Nexo

An entry for the @originalworks Nexo Writing Contest.

So, Nexo is an overdraft facility that is based on using cryptocurrency as collateral. The user transfers their crypto to a wallet that is held by the Nexo network. That then acts as collateral for the amount that you have borrowed. Once the money is paid, you get your crypto back.

While I admire an initiative that allows people to make use of their crypto holdings to acquire fiat without actually being forced to liquidate their holdings, the prices are insanely steep. According to the calculator they have on their site, you need to commit more than double the amount of the loan (for a loan of $10,000 , you need to commit BTC2.24)

So, while I think that Nexo will be successful, since there are very few companies bridging the fiat/crypto divide, it seems to me like it is bringing some of the worst aspects of the current financial system. It is a predatory model.

As any product aimed at the desperate, I think that this company will be successful, and I suspect that most of their ICO was filled by those that understand that. They proclaim transparency on their site, yet I was not able to find a single contract that I can actually check the logic of.

So, once they are fully launched, should you use them?
See my comment about products for the desperate. Honestly, if you are hard up for fiat, I think that you would be better off simply selling your crypto and dealing with whatever situation arose in your life. If you are so invested in crypto that you are unable to live in the real world, I would recommend getting some professional help.

Yes, I am going to enter this article in the competition. I think that they started the competition hoping for glowing reviews and praises for their innovation. I just thought it would be nice to point out that they are just another old money company trying desperately to stay relevant as the world changes around them.

I doubt that I will win the competition, but I fully expect to get the bonus at least.
nexo2018