Topic: Nexo - "Earn 8% dividend a year with no risks" (Read 1390 times)

I still have some nexo coins, keep or sell ?

An annual (summary) update for NEXO, and to keep abreast of events.

I decided to end my NEXO adventure this week, based partially on recent events, but also as I tire of their Proof of Assets and other verification requirements they ask for annually, and well, I just want to pull back all of my assets, no matter how small. Was an interesting ride for my stablecoins and NEXO, interest earned over lifetime was not bad. Converted everything to BTC and have the coins on my wallet now.

2022/23 summary:

• Interest surprisingly did not change at all the whole year, despite the market falling badly. Their 2022 adjustments were well read.
• They ran into trouble in the US despite buying a controlling stake in a bank there. By September, at least 8 US state regulators had sued NEXO and by December, they pulled out of US.
• Last week, their HQs in Sofia were raided by Bulgarian police. LinkedIn messages from staff say everything is ok but of course they would. Mini bank run also happened right after that, but they appear to have weathered the storm (so far). The charges are worrying though, so I'd say time to unburden some risk if you're using NEXO.

I guess I won't be updating this thread next year. Let's see =)

Somehow missed your last response here @DarkStar_

New Year has arrived but I've to wait still until end of January for all of my NEXO amounts to unlock (I thought I switched off auto-renew on the FIXED terms which give a small bump in interest rates). Your explanation actually helps. And that's really what I don't want to do, if I get into these liquidity pools, I'll risk my coins against the other pair if they go up rapidly, which I don't want. And if I put it in a single coin pool, then I lose part of it to whichever pool happens to get hacked.

So I'm still uncertain if I'll go down that road, but if I do, I'll probably end up converting everything to stablecoin (which is what the majority of what I'm testing out on NEXO is anyway) and save myself the headache of wondering.  

Anyway, January update for NEXO:
- they decided to retain old interest rates for ETH and others, so only BTC has the reduced interest rates effective last month (as updated in 2nd Nov '21 post above). Probably saw an outflow of users after this and/or expect staking on ETH 2 to prop them up.
- nothing else has changed.

The main difference is that with a pool where impermanent loss isn't a thing (or a single token pool) is that you're basically guaranteed the best outcome, being an obvious gain on the stablecoins/tokens that you put in. If the APR is 10% and remains at 10% throughout a year, your profit will be 10%. Single token pools can come with different risks though, and especially if it's a pool from a yield aggregator that uses other platforms to try to get a profit on whatever token you gave it. For example, on BSC, Belt uses Fortube (lending), Venus (lending), Alpaca (lending) and Ellipsis (stablecoin swap) to get yields. This diversifies where you get yields from, but also increases the chance that a platform ends up getting hacked/having a bug causing you to lose some/all of your stake.

For non-stablecoin pools (ex: USDT-BTC), and ignoring trading fees, if the price of one side doubles relative to the other side, the total value of your stake would be worth 5.7% less than if you had just held onto the 2 tokens instead of putting them into a liquidity pool.

Definitely the plus points for me here compared to a NEXO-type company:
- non-custodial
- like you say, you can see where your assets are, and even see the activity in the liquidity. I really like this.
- if you can read code, even understand what the smart contracts say and do -- here is where I feel most vulnerable as I wouldn't be able to tell if there were a loophole or backdoor in a contract, so I have to trust
- the insurance schemes (Shield is popular it seems) for some pools are even better than NEXO's, assuming the contracts work out as they should
- you don't have to keep wondering what terms will change or get amended. NEXO keeps changing the (withdrawal) fee structure, how membership levels advance, so you never really know where you'll be in a few weeks.


This is where I really need to read up and understand before I get in with my NEXO "winnings" -- probably December.

Contributing liquidity to swapping pools has never looked more mature now; last year was messy, first half of this year still unconvincing but some have proven stable and serious, so for me, there's a lot more assurance now than before.

Still not going to put my Bitcoin into some wrapped version, I don't think there'll ever be a day when I trust another network as much as I do Bitcoin's, but happy to do something with my handful of stablecoins and alts.

Maybe my next update will be to compare NEXO and a liquidity pool.

I think DeFi will definitely be something worth trying out. The nice thing with DeFi is that you at least know where your money is going and where the profit is coming from, which feels better to me than a black box CeFi company.


It depends on what specifically you're looking for. Stablecoin pairs definitely pay less than non-stablecoin pairs, because impermanent loss isn't a risk with stablecoin pools making it comparatively safer. If you look at single token pools (such as belt.fi, also on BSC), you'll see yields for USDT at 11.29% compared to 3.68% for BTC.

My next experiment would be to move out these from NEXO now and onto these non-custodials (where the interest is higher anyway). Not that it's any safer, but I estimate the risk of these "Dex" collapsing is at least marginally better than a centralised lender MtGox-ing.

What do you guys think?


I imagine a sudden dip in crypto prices -- and the ensuing bank run from users -- would take them close to the brink, when their crypto collateral no longer covers the total values. Their own token is worth about $3 now, from less than a cent at issuing, so I suppose they'll have built up a tidy sum in fiat and stablecoins


Yeah, that makes the most sense. USDT was, after all, my choice of currency to risk with them (due to the high interest) and if NEXO works like the exchanges do, I'm sure they could also have standing deals with Tether and other issuers or even exchanges themselves OTC to perhaps supply them should the need arise.


Didn't know this, but yeah it makes sense to me now.

It's the opposite for those non-custodial lending platforms (or defi should I say?). I do peek at stablecoin staking pools on some "defi" platforms and those tend to be the lowest yields. For instance, on BSC, the Busd/Tusd pairs are about half the interest of Busd/BTC.

The increase (or lack of reduction) in stablecoin interest rates is in line with a ton of other CeFi platforms. BlockFi, Ledn and Celsius have both kept stablecoin rates at around the same values they were offering before while decreasing the interest paid on non-stablecoins. I believe this is a result of large volumes of lending to institutions - many companies might want to short BTC, especially as the price of BTC keeps rising, so demand for stablecoins (and thus interest) goes up.

Well, the good news is that they haven't gone bankrupt... yet


Oversimplifying this, to me, it looks like they are offering a lot on stable coins to grab more fiat for which they would definitely only pay 8% in $ terms rather than trying to acquire BTC for which in $ they might have to pay double the sum. It might of course be caused by the fact that borrowers might have switched from getting loans with BTC as collateral and more with stable coins, which does make a lot of sense since a flash crash will not trigger a liquidation.

Even 4% still beast this new offer from AMRO but the risk would not make it worthwhile.


Not surprisingly, the company owns a lot of those, the sudden jump in March earned them probably a hundred times in token value compared to what they are getting from crypto loans.

So last year, I wrote that I decided to test NEXO services with USDT. Can't believe it's been 15 months since that experiment.

Thought it could be interesting to update a number of things about this service, for those keen to learn or find out more. This is not a recommendation in any way, I'm still highly suspicious of them and you should understand from past discussions that your funds are not as protected as it appears.

Updates since the last post in July 2020:

1. Insured amount has gone up from $100M to $350M. However, this represents roughly 1% of all assets under management. In other words, if they lose everything, every customer gets about 1% back as insurance. Extremely unlikely to happen, but hey.
2. They now have real-time audit checks with a US firm so anyone can prove they are over 100% collateralized. Essentially, this just means they have more than 1:1 funds held in their accounts and on user account balances. Note, it doesn't say how much exactly this over-collateralisation is, and what happens if BTC or ETH were to drop 50% (as I suspect they would then be in trouble with those holding fiat balances.
3. Percentages have drastically reduced to roughly half of OP's title. You also get less and less from next month the more you have.
- 4% if you own less than 50k
- 3% for something like 500k
- 1% for anything above 10M
(numbers not confirmed and you get increments based on NEXO holdings as a percentage of portfolio as well)

You earn more if you choose to receive interest in their tokens. So definitely pushing more people to put in more tokens, and taking away the sting of high interest on huge savings.

What's interesting for me, though, isn't that they've:
- reduced interest on Bitcoin and ETH for whales to 1%

but that they've retained 4% for fiat. And retained 8% for Stablecoins. This doesn't make sense to me at all. It's almost as if they see stablecoins as the... safest bet for them?

It's not an anonymous site like usual ponzi sites on the internet. The team behind NEXO is publicly informed. They have licenses and have to follow EU regulations.
In case something bad happens I have seen investors would lose their investments, as the insurance doesn't cover any considerable amount of money. But, couldn't investors fill a lawsuit against NEXO in this case? Wouldn't NEXO be forced to pay investors back in the court?

A similar investment platform which turned into scam was CRED (declared bankruptcy), but investors are still sueing the business and trying to recover their losses or part of it.

Yeah these comments aren't really a problem for me, I don't care for nexo coins (although I own some of them). More info on their lending activities and the return they get, allowing them to pay nice BTC/fiat dividends, is what I'd like to see.

Despite i don't believe in trustpilot scores, as they can be fake, there are only 28 negative reviews for NEXO out of 1406 in total (less than 2%). And the cases mentioned in the comment you quoted (latest five reviews made in the ssame day for the same issue) are all about how the NEXO price dropped and they received a reply from NEXO officially.
I am not defending NEXO here, but the project seems to be solid enough to maintain the good position in the market. If you have proofs against it, just post them and let the community make the right judgement.

agreed nexo is pure scam, they liquidate accounts instantly

https://www.trustpilot.com/review/nexo.io?languages=en&stars=1


STAY AWAY FROM NEXO, THEY FAKE ALMOST EVERYTHING

Well said and i would rather do the same than on trusting up these guys!

They might be known on this crypto world but that wont really be enough to convince me on letting my funds do sit for a year and just waiting for that 8%-10% return annually.

If you do really take some considerations on thinking up into those situations that you had mentioned then you would really have that in mind on how they would really compensate such loss
for them to be able to still give on the interest that they had promised into its users.

Good thing for them if market is rising up which we can presume that it did really increase on what they've been holding on but if the market would go to the opposite way? then whats next?

I've invested in a 10%/year scheme some years ago, it was in real estate, the company was serious (still exists), if everything went well it was fine, if there were some hiccups you could earn less than promised, and if it went badly wrong you could lose your investment.

In my case it went mostly well and I got the 10% return, then of course the taxman took half of it.

That's my way to say you can't have good returns without some risks. But you're right, I'm not going to jump head first, doing some more research.

If you are fine with doing a KYC with the company and entering the interest payment scheme then it is all good for you.

The speculation is more of the fact that a third part holding your coins is not a secure way to keep the coins. After all this is nowhere close to a physical bank where they keep the money in vaults or use it to lend money to others. Government regulated banks have some obligations while I am not sure what Nexo has to do in case their offered loans are being defaulted and the collateral involved is depreciating as well.

Dont let the "passive income" fool you into giving your personal details to some anonymous organization. In that sense it would be better to give the money to a bank that you know and trust.

So, I don't know if this is new since I only signed up recently (someone offered to buy nexo tokens at a high price so I bought them and sold to him), but nexo also offers to earn interest on fiat money. More specifically Euro and Pound. The same 8/10% as with stablecoins. You need to do the KYC, however.

Needless to say this is a very high return in Europe for something supposedly without risk.

Hello, you can share the results of the received devidends

This is valuable suggestion of not putting too much stake under 1 thing only. And, not to invest too much as well where the control is not in your hand. Might be you may get better 1-2% extra than investing elsewhere but always ensure it is being done in a right manner and the risk is limited.

Well I don't know what country you live in - but here in Northern Europe the banks pay about... 0% interest on a savings account. You might get lucky and find some odd bank that pays 3-4% annually - if you lock the fiat for 3-5 years. Lets not forget that fiat also has the ability to deflate just as much as a crypto currency or a stock..
So 8% with the option to put 10% of the savings into tokens that payout yearly dividends and more for holding it longer sounds pretty nice to me; it just happens Nexo is paying out their 30% of the net profit today the 15th August & soon we'll see how much of a return they hold; as we don't know how many will receive dividends etc. What I'm personally looking forward to is their promised card that you only need to hold crypto to use and spend fiat with at a fixed 5.9% annual interest rate; this will allow anyone to hold crypto and spend for a few percent of interest in the case the assumption is prices will rise higher than 5.9%, right? That's a great way for me to use Nexo as a service provider... But it's been about a year now and they still havent shipped out any cards to my knowledge; so it's kind of wishing for the best and watching how the company progresses & if they actually surpass dreaming and push out the plastic cards. I'm about 80-90k in a backlog of requests to recieve a card so...

Hopefully they start working on that card of theirs with their "fresh" influx of funds when they officially get 70% net profit "re-investment" on dividend payouts (Nexo to Distribute $6,127,981.39 in Dividends today).

By the way the ARN of cryptos with nexo is 4-5%, and 8-10% with stablecoins... You can borrow about 40-50% of your deposited btc and such cryptos, and up to nearly 80-90% of stablecoins iirc. Not too bad if you wanted to spend some of your capital but wait til your trades gained some extra profits from that same capital at just 5.9% interest.

Exactly. That’s 8% per annum which is pretty less considering the fact that bank pays the same percentage of interest to a fixed deposit (savings) account. People who just want to hold on to stable coins for a while until they wish to enter the crypto market again can opt for such scheme else it’s not that useful unless you want a crypto backed loan. Daily traders earn 5 to 6 times more amount on daily basis by short term trades. Nexo overall is a secure and trusted platform, but the interest rate should’ve been higher considering the fact that it is for per annum and not per month.

I have been using the Nexo platform for a year now. The project is highly trusted, well managed and handled by a team of professional. Everything is quite systematic. It is true that Nexo pays 8% dividend interest on all the stable coins such as USDT (Tether) etc. The stable coins help the platform to maintain higher liquidity for its customers.

The platform provides crypto-backed loans starting at 5.9% APR. It also pays 30% of its net profits as dividend to all the NEXO holders based on the quantity of NEXO coins then hold into the wallet and also has loyalty reward. I would recommend you to check the platform out.

I personally use Nexo since 6 months. I put a few 0.coins in there to try it out: it's less than 2% of my holdings. I find it a way to stack sats.
Of course I know that they hold and control my funds and I have accepted that.
So my only advice is don't put all your eggs in one basket. If you go all-in on Nexo or any other centralized entity then you know you are basically giving away your funds to a third-party.
Do accurate research on every service you intend to use.

Where did you get this from? I looked up their website and couldn't find anything like this on any announcement. And why would they be scamming if it's just about restoring Tether wallet? A lot of exchanges do that all of the time. No big deal:)

Thought to update here, seeing as I saw another thread on Nexo in Service Discussion. I haven't changed my mind about them (neutral, leaning towards wary), the model appears to work. Lend money, use overcollaterised loans, and you can always pay people back and bank on crypto doing better in the future.

As TryNinja wondered here, I'm also curious to know what happened during Black Thursday. MakerDAO and others had to liquidate a lot of lenders and are trying to make them whole again but I know some people were really pissed with defi platforms in that time.

Right so against my better judgment, and perhaps since I anyway do trust banks with my fiat (yay), I signed up with Nexo around the time I started asking in this thread and deposited all the USDT I had from cumulative small client payments. Interest racks up on the next full day, though it's 8% and not 10% as advertised. I clarified that you actually get 25% more interest (so 10% instead of 8% for fiat/stablecoins and 5% instead of 4% for crypto) IF at least 10% of your fiat value holdings are in Nexo internetcoins. So, nope.

I'll probably leave that in there, it's not so much I actually don't hold stablecoins but you never really refuse any form of payment you get, so maybe I see a healthy 8% interest after a year there. I'll be sure to update.

Oh, also applied for their card. Seems like I'm in a waiting list.

BTW, sharing a selected response from Customer Support "Daniel":

Question: Is this $100 million an overall insurance or is it per account and per instance? It doesn't seem like much to be honest, and where can we find information on how much deposits NEXO has already?

Answer: Even if we hold more than 100 Million in custody, BitGo cannot be compromised to the level of all assets been stolen with a single attack. BitGo does not keep all of their cold wallets at one place but in multiple vaults in different banks which guarantee their safety with different insurance policies.
With the level of security that BitGo has, a breach of that size is as close to impossible as it can be.
What I am saying is that even if a breach ocurred there isn't a risk of loosing funds in a amount as great as $100M due to the way BitGo manages their security.
This is why you can be sure that all of your assets will be insured at 100%.


So, it is ONLY $100M insured. They feel certain BitGo can't lose so much, but now you know, they really only do have that much insured. Probably not even 10% of total funds in deposits if we believe there are billions locked up in Defi now.

nexo is already scam. "it will take around a month to restore the USDT"

I'm all about "not your keys not your bitcoin" as I said, but I also believe in spreading my risk. I still hold a majority of my savings in a normal bank account insured and guaranteed from loss. I know promises are worth nothing but I rather think having some of it in there (not even earning interest btw) is just being practical. I am ALL for Bitcoin but I don't have the luxury of putting everything at stake on something that to me is still very much a (so far very successful) experiment. It would probably be a lot more different if I were single and alone in this world, but alas, life means I have responsibilities to many other people =)

And yeah, I imagine it's definitely not middle class on Nexo, and those on trustpilot are the plebs like me...

BitGo, for example, the ones insuring Nexo, are also reportedly the playground of the super rich. I mean, plebs like us won't even get a call back from BitGo if we asked for a quote on their vault services I guess!

The point is that the majority of the crypto "venturers" are wanna-be get rich quick mentality people. They are not as diligent as traditional traders of wall street and others which is the reason why we see so much FOMO, among other factors.

I consider these crypto lending startups to be what is having a similar outcome of mutual funds though they are completely different things. Mutual funds go to stock, bonds and gold market investments while crypto lending money goes to borrowers who will be going for the crypto market or gambling. Even then, I am more inclined to keep my coins under my control because it is crypto after all, loads of legal gray areas and points that can end up being against in based on your country's legal status of bitcoin.

Reviews are not to be trusted. Every business makes some allocation to social media buzz and they drive these fake reviews. In general a review is always biased, unbiased reviews are very very rare.

@stompix yeah that's the trouble, shilling. But a notable lack of scam cries either after 2 years makes me wonder. I opened a suppoelrt query to ask for their licensing details but no reply yet.

And it is actually 8% on bitcoin that I can see from my dashboard. Actually 8% btc and 2% in nexo shitcoin so 10%.

Curious to know if anyone actually tried. Might just take the dip with a small amount for a year.

You know people criticize Nexo with the argument that you don't hold the funds, but they themselves use a bank account where it's exactly the same thing (and even worse knowing that with a bank you can't empty your account overnight.)

Since Nexo is based on Switzerland I suppose the company is regulated there but since it's powered by Credissimo I'm not sure. And this sentence from the FAQ makes me think it's regulated by different agencies, which makes sense if they operate in different countries

I remember an article not long ago talking about the average amount invested in this platform. It showed that most people aren't the typical average Joe, not the middle class I mean. And you won't see "rich guys" posting reviews on Trustpilot

Maybe because in reality, nobody is using them?

I went to trustpilot to check the reviews, common
https://www.trustpilot.com/review/nexo.io
Great project! Much bumping spam!


Isn't it 5%? Or, "up to"?


I have a feeling we'll be asking the same question in another year 

Right, so, I hope it's okay to necropost almost but I wanted to know if anyone found out any new information about Nexo. Original thread here but this one is where the discussions are at.

I'm all about keeping control of my own Bitcoin and I'm totally fine with that. But after experiencing personally lost keys, and remembering also that my own kid lost his first Bitcoin I gave, I'm considering options for someone to hedge a modest stash.

"Defi" they say, but I remember Black Thursday and even smart contracts aren't mature enough to withstand black swan events, so what about a service that is supposedly also insured?

Tried my own basic DD on Nexo. Honestly can't find much more than already discussed (the BitGo insurance is via Lloyd's of London but yeah means nothing until they actually pay out doesn't it?).

I'm looking online and on trustpilot etc and initial findings suggest people can't find bad things about them, but neither can they find good things. Vague website section on them being regulated, seems they're separately registered in every jurisdiction, unclear on who monitors them.

I'll admit the interest (updated, it's 8% directly on Bitcoin itself, paid daily, withdrawable any time) is also attractive.

Other discussion threads already exist, their official ANN doesn't really seem to be handled by their own staff.

A year later almost, does anyone know any different?

The collateral requirement is very high, %200 of the total amount of your loan. I guess this really forces the lendee to pay. So, I would say they can really sustain it and if profits decrease i guess they can adjust it and carefully explain to nexo holders since they have been transparent.


https://nexo.io/company

parent company of nexo
https://credissimo.com/

EU has been rapidly improving in crypto infrastructures. Big companies have been working together in blockchain technologies that probably you didn't heard of.


but you can lose alot more if the trade doesn't move to your liking.

Everybody who holds one of the major cryptos or stable coin has access to their loans. Except for countries under sanctions like North Korea, Iran, etc.

I'm staking part of my coins there for interest.

Also, I already use it twice for short terms loans. I'm pleased with the experience. You get an auto assessment of how much you can borrow and the money is in your account in the next business day (SEPA, I don't know for SWIFT). And you can return it whenever you want/can.
NEXO system is made professional so I think it's sustainable.  

Just make registration and make your own due diligence

It all depends on what your profits come from. In this case, it comes from users opening a credit line and spending their fiat, the interest is set at a minimum of 8% but as I can see it can go to 15% for first-time clients.
So yeah, if you lend money with 15% you can pay somebody 8% interest.

But, as I previously said I don't know who will access these types of loans because it's quite tricky.
If you're not totally bullish on BTC and you're not sure that the coins will grow by at least the interest percentage, plus taking into consideration you have to trust them with double the money you can spend...I really don't see why would you use this.
Also, the interest is in $ as far as I can see, so if the loaner must be bullish, the lender must be a bear, cause he will think the fiat earns in BTC will be lower than 8%.

So, does someone here knows somebody who has taken a loan from them?

The question would be, is there someone who would tend up to use their service or do entrust up some funds?
8% dividend within a year is somewhat a realistic numbers to look when we do talks about interest or gains for annual basis
the only thing i do complain anytime is on using up the word "no risk" on any website that they are trying to advertise.

You could look at your money as supporting a Dice site bankroll and then the site is sharing 50% of its profits with you. It's the same with NEXO and other platforms. You giving them your money, they are loaning it at 16+% with collateral different coins, and then you are collecting profit.

IMO it's sustainable. Kind of. Until there is a demand for the loans I don't see a problem. And still much more secure than most passive investments with such return.

Attractive or not depends on what you compare it. Let's stop doing pointless discussion because surely everyone can say X is better than Y while Z is better than X, and so on.

Instead of focusing on that, we should discuss whether this 8% is really possible and sustainable or not.

You can't compare a passive income with investments!
By your logic, why should we bother to invest when we can DOUBlE or even TRIPPLE our money in a matter of seconds - just roll a dice.

The key work here is pasisve.
Every IEO/ICO investment requires a lot of due diligence if you don't want to end up losing your money. And is way more risky.



Compared to bank deposits, etc. is pretty lucrative. The risk is not much higher.

Yes surely it is not low. But it is low when you think that you can grow your money a few hundred times more if you invest in the right ico at the right time. ico ieo or whatever that is they are calling them now days.
Second thing is that you must consider the depreciation of Nexo's inherent value as well. The appreciation or depreciation of the original fiat money invested into it as well.
Comparing all that, I can say it is not very attractive.

8% is not low at all for a passive income.
There are many ways to do more, like you've said LBC is one of it. BUT trading in Localbitcoin involves activities like dealing with reversible payment methods, spending your time, etc. LBC is not a passive business at all.

NEXO was the first loan company to offer such an interest and out some Stable coins there a few months ago. For now, I'm happy with the interest and results.
Now there are others who are doing the same, like Crypto.com with similar interest rates.

Very correct. I think the first time I heard about Nexo is through their ad on coinmarketcap. I always wondered if they actually have any banking licence to offer 8% interest. And call it interest as well. Because I think you need some kind of banking licence to call what this as interest. And what about deflation? or depreciation?

Yeah, I've to admit I've been tempted by these offers, keep seeing them on Etherscan or some other data site. I even know a few people trying it out.

The last time I trusted my funds to a platform was on Poloniex, but I felt that there, at least, I set the terms of expiry on my own (and since most of those guys at the time borrowing had margin calls, I'd often get back my loans sooner than expected). Made a tidy profit but was acutely aware of how much I was risking by placing it there.

8% is not fairly safe, by the way. It's extremely high yield... compared to negative interest rates in Japan and some parts of Europe!

Not if your thinking from a fiat POV. Comparing fiat investment options, 8 percent a year for fairly safe investment is almost double what banks are offering, and it's a pretty good deal.

I'm assuming most of their customers aren't really crypto-geniuses and are more traditional investors who want something safe - which I say with a grain of salt because this could very well end up scam.

Given the risks involved in anything related to cryptocurrencies, 8% is sure low, but I wouldn't compare it with LBC, either you do in-person deals which is a time commitment, or you deal with online fiat transfers and accept all the risk that that entails (chargebacks, fraud, etc.).

8% ? thats very low .

if you have 1 Bitcoin , you can make 8% interest per month trading on LBC .

That is if there actually was 1:1 loan for each dollar invested -- which we don't know. (I think?) We have no idea how much they're currently lending, and how much capital they currently have generating interest. If they have way more capital than outstanding loans, they'll either need to stop investments, or run with our money as it's unsustainable. (As i don't understand who would want to open a overcollateralized loan with them in the first place, but apparently this is a big market?) ...



Like all the cloud mining schemes, yes.
But as i've posted previously, you also have these sites which pay in BTC
https://app.blockfi.com/signup

https://www.reddit.com/r/ethtrader/comments/ay23r0/blockfi_interest_accounts_to_good_to_be_true/?utm_source=share&utm_medium=web2x
Unless the interest rate (which currently is 6.2%) goes down when they're overcapitalized in comparison to outstanding loans of course. (Which i can only assume is what they'll do, which will probably result to a race to the bottom the second these sites get popular.)

They can offer such interest because they also charge high interest on loans. Bear with me, I'm talking about fiat deposits. So when you deposit fiat, they use this money to give loans. And they give loans to people who lock their crypto with them. So my fiat deposit is backed by "overcollateralized loans" meaning they lock more crypto value than they loan. They also say
but I wouldn't count too much on that. Basically I think my fiat deposit is save as long as bitcoin doesn't crash for more than 50% because in that case, the locked bitcoins are worth less then the amount Nexo lended to loan takers.
Good explanation from their FAQ:

I love the "no risk" part! The last time I've seen something similar was when theymos announced HoweyCoins with GUARANTEED PROFIT

Of course nobody can really guarantee this, and if they could, they wouldn't need you because pension funds and others would line up to invest.

Where's that? We get around 0.03% interest here.

It doesn't sound like their 100 million guarantee is going to be enough.

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This could be a great scheme for a ponzi (I'm not saying it is a ponzi, but bear with me). Look at this table (source):

Now suppose you accept Bitoin, and pay out 8% per year interest on the dollar value it had when deposited. No matter when someone deposited a certain amount of Bitcoin, a couple years later you're in huge profit, despite paying out 8% per year!
Even without the risks, as a Bitcoin owner it's a terrible deal to exchange just holding Bitcoin for 8% interest.

Everything's legit until it's not. Do they have any sort of banking licence or deposit insurance? What guarantees are there their terms will remain the same?

This is a pretty much unknown institution offering an interest rate no established place can match. That says something.

Most of this thread is about depositing crypto and earning interest
But I am more interested in their newer program Earn 8% Interest on EUR (fiat) Nexo website, Medium article
Is anyone using that? I have some fiat sitting at the bank and I'm getting almost zero interest, even if I locked it for 12 months, I would get only like 1% interest. So Nexo's 8% interest per year program looks perfect for me. It also says I can withdraw anytime which is good because I have this fiat for emergency for example if my car breaks and I need to buy a new one in short time.
But is the risk worth it? I only heard about Nexo recently but they seem pretty legit to me.

I checked the rate on deposits. Wow, 15%-20% even with inflation it's a nice rate, but I doubt it can be a stable scheme unless the bank itself is truly making 30-40% p.a. lol.

Here, for the simplest plan (the most popular) is giving 0.75%. Ridiculous. You invest $10k you get $75. Seriously? I would rather buy some cheap gold coins and get a double rate.
The 2nd most popular is giving between ~1,5% to 2.5% (depending on how you spread the funds) but your capital can lose value, so.
Mutual funds in real estate are giving ~5%

I prefer to look at some crowdfunding platforms, I'm looking into 1 currently, focusing only in real estate, they can give 8%-10% yearly based on a 12 or 24 months contract. Yes, there is a risk too, but it's smaller than a fall in the real estate market. Here the risk is that the borrower does not repay. But their clients are small real estate companies, not individuals it's lower the risk. (And adding that they're very very selective to accept a new client...)

6% I could take the risk if I'm sure people can basically withdraw their initial investment at any time. Just a matter to spread the risks.

But those rates as you've said are for their currency, the rates at those lending services are for $.
So it would make a lot of sense for a guy holding Turkish lira to consider it as an investment but ..taking a loan?
Not only you have to deal with the inflation but with the rates also.

Imagine somebody from Venezuela trying to pay a loan in USD, he must earn each month twice as he did previous

Which again bring the question, why would anybody take a loan from those guys?


Means zero to me. Remember Madoff?  Why would you trust Bitgo? Just because some big names have invested in it?
I know tens of so-called unicorns that received millions in backing from big names just to go bankrupt in under a year.

Ps.
This is not directed at you,  , just something I've seen on this forum lately.
When some sort of banks like start-ups appear, if they deal in crypto, people are immediately starting to clap their hands, even if the business is started by GS or others, and at the same time, they boo the same banks that own that business.

It's like sticking a logo on a rag. if it says Cavalli, it's instantly not a rag, it's the new ultra elite exclusive fashion line.

6.5% per year is way too low for the risks involved in letting someone store your coins and the likelihood of a hack, inside job or an exit-scam.



There are tonnes of countries that will pay 5-10%, some will pay 15% or more:

https://www.reinisfischer.com/highest-deposit-rates-world-country-2018
https://www.financialadvisory.com/world-deposit-rates.html

There are several caveats, however, namely:

1. they accept deposits in exotic currencies whose inflation rates might be high;
2. which is not a problem if they pay well above the inflation rates;
3. but it might be a problem if the country is corrupt, unstable, sanctioned or in the midst of a civil war;
4. there might be capital controls
5. some of them may even pay well for USD deposits, but points 3. and 4. still apply;

IOW, caveat emptor

Isn't their insurance for when they potentially go bust, and not necessarily guaranteeing the price of their little shitscoin?

Which is why i wonder if this isn't some sort of  a giant ponzi scheme, but apparently Nexo  (https://support.nexo.io/hc/en-us/articles/360017628093-Security-and-Insurance)  is insured by Bitgo, https://www.bitgo.com/resources/insurance

And so i don't expect them to hold funds of what they can confirm is a ponzi scheme. Idk.

Yep. I'm not sure where you're from that banks pay 6.5% interest, but that really takes me back to '08. Can't be real.

Nexo has no minimum amount, and Celsius probably doesn't either. Everybody's welcome !  

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Apparently BlockFi also lets you earn 6.2% interest (min of 0.5BTC)
https://blockfi.com/crypto-interest-account/

They seem to have been in the business a bit longer and allow you to use BTC instead of whatever shitcoin nexo uses?
Looks a bit more interesting.

Interesting. I've never tried any of these lending platforms, but I'm going to check this one. 6.5% a year doesn't sounds bad, but I'm not sure that's worth considering all risks. Now matter how legit these platforms looks, it's hard to trust them with my money in long term. But maybe I'm going to try it with small investment. Does anyone knows how much minimal is needed to start?

I don't know where do you live, but I would be happy if banks in my country would pay such interest. In my country banks paying less than 1%. For example my bank paying 0.05% interest what is ridiculous...

Of course, they can't.

I'm looking at the graph of their token (of course they had an ICO)and it's all over the place


At least they are still 7% up from the moment of the ICO, but comparing to Bitcoin it's -30% down.
Celsius is even worse, down 70% alone vs the USD.

Anyhow, I never understood those types of lending websites.
So I deposit 100k$ worth of Bitcoin to some foreign business, take a loan of 50k on which I pay interest two times as much as my bank offers because...
Just for the thrill of seeing if I can get back my collateral after I repay the loan or they went "bankrupt" a day before?

Banks don't take a risk. The entity taking the risk is the loan insurance issuer. Because you when you borrow money there is insurance for the bank in case you don't pay or become disabled, ect. You don't understand what is weekly, monthly, or P.A.? Do you have a bank account at least? 6% can be considered as a decent rate, considering banks offer ~1%

Interesting that they're guaranteeing a 1-1 dollar redemption for all stablecoins. There've been cases of the issuers themselves refusing to redeem coins. Sometimes it's compliance, sometimes because it 'makes us look bad' on Coinmarketcap. And there's good old Tether of course.

https://www.coindesk.com/winklevoss-crypto-gemini-gusd-stablecoin-redemption

How can this third party company guarantee it for everyone?

Even banks carry some risks so if anyone says it's investment without any risk, he/she is in mistake from the very first because doesn't matter how they acquire profit, loans carry a lot of risks too.
Maybe they are safe but don't know why you have to wait years for 6.5% profit (that number is stated in article instead of 8 as it's on thread's title). I think investor who waits for 6% guaranteed profit isn't good one and if you have a lot of money, better to invest in business, fund startups and etc.
How much profit (max) can you get if you live in usa and deposit in bank?

The average investor doesn't want to receive profits every month, too long.  It's acceptable if it's your bank, but when dealing with an enterprise like this one it's different. Yes, the payment interests are credited every week. Sure you can compound yourself the interest but it doesn't worth to go 100% compounding, unless we're talking about xxxx$ weekly in interest.

So you can't withdraw your interest, only after how much time? but it does get deposited into your account every week? ...

If it doesnt' compound why not just give it every X months, when you can instantly withdraw it and redeposit it to make it compound... ?... I don't get it. this seems flawed.

100% a scam and will fail. They will not be able to find enough people paying over 8% interest for loans that will not default to possibly keep this up for that long.

Interest payments are based on cryptos, there are no interest payments in dollars. And if you choose to receive the interests in CEL (the Celsius token) the percentage is higher. But if I'm correct borrowers can get a loan with USD as collateral too instead coins

No, that's why they explained there is no compounding interest


Anybody noticed the *
"Interest rates are subject to change". What does it mean? It means you can borrow $50,000 with 8% rate but 6 months later wake up a morning and discover the rate changed to 20%

Looking at Celsius; do they let you earn interest on your BTC, or do you need to convert your BTC to USD and then you earn interest on USD?

Looks like you can earn interest on BTC, which could be much better than Nexo (since there you convert your BTC into USD before you can earn interest.)
But; i agree, all  of these companies look pretty shady to me, and perhaps it's not worth the risk at all.

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Do you use them? (Celsius that is.) I'm reading their FAQ and i'm kind of dumbfounded...

What does that mean; after a year i can't reinvest my interest? huh? Interest is deposited every other week. HUH?

So, why wouldn't i withdraw the interest + my deposit, then redeposit all of it? I don't get it.

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I don't really completely understand these business models either, which i guess i should.
>https://celsius.network/borrow-dollars-using-crypto-as-collateral/
For 1 BTC, you can loan 5600; so 2:1, against a 9% yearly interest.
Why would anybody do this?

They are calling it a 8% but I'm only getting 6.5% of interest on my wallet. Their interest rate is less than the immediate competitor Celsius but they provide much greater flexibility on deposit and withdrawal. Not stated as such but the Celsius wallet is more like a fixed deposit than a normal deposit account.

Its 8% per year. Actually its only 6.5% per year. Thats like regular bank accounts.

So thats a pretty small amount considering the risk that you are taking to put your asset into a third party lending platform and allowing them to lend it to users. It might seem lucrative as a source of passive income - let your money grow but most of the time it ends up with problems since here on the internet nobody is going to investigate properly and judge in case a theft of funds happen. These sections are grey enough to allow shady companies to take advantage.

Nonetheless, I am not saying that NEXO is a scam, but I would tread carefully with my coins. I prefer to look them with me rather than invest them. But those who want to take risk are free to do so. Let them judge the level of security measure that NEXO takes.

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Offtopic: What happened to SALT Lending? I heard some rumors that SALT was liquidated into NEXO from some sources which I am not sure if they are conspiracy theories without proof or true.

You can find some testimonials of people who used them on the website (linking to Twitter) and with the money they are putting on marketing, I won't be surprised If the statistics on their website regarding the users, etc.. are accurate as I've seen them being advertised on Facebook, CoinMarketCap, Etherscan, and some other big sites. Personally though, I wouldn't suggest the service to anyone simply because of the irreversible nature of cryptocurrencies. This is no different from exchanges controlling your private keys, I don't see why would anyone want to risk their funds... there is always a possibility of inside jobs, hacks, etc.

While there might be seemingly legitimate ones like probably BlockFi and Celsius Network, I've never found these services worth the risk. Regardless of how high the percentage dividends are, handing over your Bitcoin to a centralized entity especially for long periods of time is a big no for me. Heck, just thinking of it makes me feel uneasy.

While 8% sounds really good, it's suspiciously quite high though.

See this article below which explains it:

 https://medium.com/nexo/earn-interest-and-protect-your-stablecoins-with-nexos-1-to-1-conversion-guarantee-dbdefa8a8152

So basically, you deposit your crypto, convert it to some shitty stable coin of them, and earn 8% interest on a yearly basis. They say they use them for loans or something? aaaand they're 1:1 backed.. ?

Hmm. Seems too good to be true other than the fact that your "gains" are measured in USD/EUR ofcourse, and not BTC. For now it seems that you can't earn interest on BTC (it says "Coming Soon".)

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Is anyone using them? I've heard of them in the past for getting loans, but not this compound interest scheme. Might be interesting if it's legit.