Crypto Lending Platform Nexo Doubles Rates
The new rates are a response to rising volatility and uncertainty in the marketplace, which Nexo attributes to the COVID-19 pandemic and upcoming US elections.
The update is the beginning of a new “Nexonomics” initiative aimed at making improvements to the NEXO token on the platform. The firm states that the improvements will deal with tokenomics, utility, and the native currency’s underlying value.
The firm now offers double the interest on BTC, ETH, XRP, BCH, LTC, EOS, LINK, XLM, TRX, and PAXG, with rates of up to 8% APY.
In total, the two-fold increase in interest rates amounts to a 1% hike in standard interest.
Nexo co-founder and managing partner Antoni Trenchev described the company’s strategy as “market neutral,” stating:
“With volatility rife around the second COVID wave and exacerbated by the US elections, we want to give our clients the financial stability and opportunities to guarantee their peace of mind – now and for the future.”
Keeping Pace With DeFi
The move may be part of the firm’s effort to remain competitive in the ever-growing DeFi sector.
Nexo was founded in 2014 and has proven disruptive by slashing borrowing costs and paying out more interest to users than traditional financial services. However, with an ever-growing number of lending protocols in DeFi and over $11.27 billion in assets now locked in to the ecosystem, Nexo may now be cornering a smaller chunk of the market.
DeFi lenders such as Maker have seen major growth throughout 2020.
The new initiative to boost interest rates will likely be well-received by Nexo users and may be instrumental if Nexo remains a key player in crypto lending.