Yesterday we hosted the July edition of our monthly Ask-Antoni-Anythings with Nexo Co-founder and Managing Partner Antoni Trenchev. Thank you to those of you who got involved – we hope to have given you loads to look forward to. In this AMA, Antoni covered questions about the growing regulatory involvement in crypto, Flare’s Songbird airdrop, and updates on the community’s most-wanted features.
To find out all our exciting Nexo news, watch the full AMA or read the summarized answers to the top five questions below.
Will Nexo distribute the Songbird (SGB) tokens airdropped from Flare?
I love to see engagement from the XRP community. We have a positive development for them that will be announced soon, so stay tuned. Now, about the airdrops, our team is leading discussions with Flare about how to best protect the interest of XRP holders. We will update you as soon as we know what the outcome of our talks with Flare is.
We’ve noticed a lot of Nexo’s investments in other platforms. How do such investments benefit your current clients as opposed to investing in adding new features to Nexo?
We haven’t slowed down on the “feature adding”. The team is still getting larger and larger which means we can engage in even more tasks and developments. This is Nexo’s main revenue driver so we’re never going to stop pushing ahead in terms of new features.
The investments we’ve made are in projects where we either don’t already have the expertise they have in a certain field or where we feel that another company is ahead of us. It makes sense to invest in such projects even just from a capital gains perspective. Despite the market downturn, in the last two months, we have seen $4 billion pour into crypto startups, so we want to be a part of that. It’s nothing gargantuan given Nexo’s total balance sheet. 95% of all startups fail so we are prepared for something like this when managing our own corporate funds. But we do feel that there are a lot of opportunities apart from the capital gains benefits, such as gaining access to certain products so that we can quickly bring certain services and offerings into production that might otherwise take us longer.
For Nexo users, this means that you get to enjoy products and services that come into fruition quicker.
Can we have a function to unlock Fixed Terms on fiat in exchange for a small fee?
Unlocking Fixed Terms defeats the purpose of locking assets, even if there is a small fee since Nexo relies on the liquidity in these locked accounts for our other products. But we will look into this going forward and see what we can do.
We do however have the Unlock Fixed Terms option. It’s a new feature that complements our Automatic Collateral Transfer. When switched on, it can automatically unlock your Fixed Term accounts if you have an open credit line and your LTV drops below the required percentage, thus protecting you from liquidations. For now, we have this feature and we are looking into further alternatives.
Recently, there was a crackdown against Blockfi in some US states. How will this affect Nexo going forward?
This is definitely a point focus due to BlockFi being under scrutiny in the United States, the continued Тether FUD, and even the crackdown against Binance. To briefly explain what’s going on: Now that crypto has grown to the size that it has, there will be regulatory interest. Now, this is something we at Nexo anticipated from the start and we’ve been actively engaging with regulators in different jurisdictions.
In general, sometimes regulators look into things – this doesn’t necessarily mean that something bad is happening or has been happening. It’s up to us as a community how we digest this news, and it’s up to the media how they wish to frame it. We have had inquiries by regulators at Nexo and so far all the cases have been closed with our services being found compliant to the regulators’ satisfaction.
As for the specific situation with BlockFi, our Earn product has a very similar offering to their interest-bearing accounts. I don’t have enough insight into exactly what their internal structure is and it may or may not be the same as ours. BlockFi themselves have stated that they believe the state regulators are wrong and that their offering does not represent a security – this is one of the allegations. It is still too early to know for sure what the crackdown on BlockFi means for Nexo since not enough of the details are public, but we will be on the lookout for what evidence BlockFi produces to counter the allegations against them and, since all our products are created and maintained in part by our expert legal teams, we will be responding to developments accordingly.
One thing in which Nexo differs from BlockFi and other competitors is that they have 80-90% of their business in the US. Whereas Nexo is based in Europe and we have a far more diverse global geographical presence. The US is a far smaller part of our business than it is for BlockFi. So regardless of what the watchdogs in the United States decide on a state and federal level, I think Nexo will be significantly less affected than our competitors who have the majority of their clients in the States.
Ultimately, we as entrepreneurs and founders of Nexo are happy that the regulators are paying attention to cryptocurrencies since we will finally have clearer rules for our industry.
When are we going to be able to choose to earn in kind for chosen coins and earn in NEXO for others?
This seems like a simple feature, but it’s quite complicated to make this happen on the backend. It’s very heavy on the platform, it’s very heavy accounting-wise and it’s very heavy in terms of generating yields sustainably. We don’t rely on future funding rounds to maintain our interest rates, we generate the yields through our business entirely. This concept also does not resonate well with most regulators so it’s a tricky feature to offer.
Either way, the Nexo team is looking into what the possibilities are and I will hopefully be able to update you on this in the future.
That’s all from our July Ask-Antoni-Anything. If you haven’t already, make sure you watch the full video and start collecting your questions for next time because our August AMA is just around the corner.