Introducing: Collateral Exchange Option for Our Instant Crypto Credit Lines

Jun 03, 2021•3 min read

In the current era, technology companies face the challenge of creating sustainable, repeatable innovation at scale. At Nexo, we’ve been hard at work nurturing a culture of continuous learning and innovation across all our teams and the results speak for themselves.

Introducing: The Collateral Exchange Feature

You now have the ability to preserve the value of your collateralized assets during a market downturn and improve the health of your credit line in a matter of seconds with Collateral Exchange, i.e. the option to exchange assets in your Credit Line Wallet.

The feature allows you to:

  • maintain a healthy LTV ratio during a market downturn
  • exchange collateralized assets to match your investment goals

Stabilized Portfolio & Healthy LTV Maintenance

As you know, your Credit Line Wallet spans the assets used as collateral for your Instant Crypto Credit Line™. With Collateral Exchange, you can preserve the value of your collateral – both the part already used to back a credit line* as well as the excess collateral in the Credit Line Wallet.

Imagine the price of your collateral depreciates and you don't want to make repayments – you are basically running the risk of a liquidation. By converting negative trending assets into more stable ones, including but not limited to stablecoins, you can stabilize your portfolio, thus maintaining a healthy Loan-to-Value (LTV) ratio and preventing automatic repayments of your credit line.

Flexible Collateral Management to Match Your Investment Needs

When you withdraw a Nexo credit line, it is backed by one or a combination of many of the assets in your Credit Line Wallet. Until now, you have been enjoying the flexibility of managing your collateral by transferring funds between the Savings and the Credit Line Wallets. This, however, requires additional assets. Luckily, the new swap option in the Credit Line Wallet lets you change your collateral without this requirement for additional assets.

This feature provides you an unrivaled level of flexibility to adjust your portfolio at the most crucial of times in accordance with your investment strategy and goals. It is an opportunity to protect your portfolio and re-enter the market only when you think the time is right.

With that peace of mind, once the market has stabilized, you can revert your portfolio back to its original crypto mix by repaying the corresponding Credit Line balance or by topping up additional collateral, when required.

How Does Collateral Exchange Work?

Exchanging your collateral is as easy as ABC. These are the steps to follow:

  1. Go to the Nexo platform & click “Exchange”
  2. Select “Credit Line Wallet”
  3. Pick the pair and the amount you want to swap

Few things are more pleasant than waking up after a day of market volatility with the confidence that your crypto is safe and sound. When the market undergoes a downturn and the value of your collateral decreases, there is a new tool in your arsenal and one more reason to be calm in volatile times.

*Your excess collateral can be exchanged for any other supported asset at any time. The collateral already used to back an existing credit line can only be exchanged for currencies with a LTV ratio equal to or higher than the one(s) of the collateral used, as indicated in the Nexo Platform. NEXO Tokens are currently not available for swapping in the Credit Line Wallet. Collateral exchange operations are not allowed during an ongoing automatic repayment.

Disclaimer to mobile Android users: Clients who have not installed the latest version of the Nexo app would have to utilize the web version of the Nexo Platform in order to use the Collateral Exchange Option due to COVID-19-related delays in Google’s review times of Android apps.