[Nexo] MIP6 Collateral Onboarding Application

Who is the interested party for this collateral application?

@Andy_McCall

Provide a brief high-level overview of the project, with a focus on the applying collateral token.

Nexo.io is a product that provides crypto-backed loans. Nexo.io was launched in 2017. It allows users to deposit crypto assets into custodial accounts to either gain access to yield on those crypto assets or access to credit lines. Nexo accepts a variety of different crypto assets for usage as loan collateral including ETH, BTC, DAI, USDC, as well as many others.

The nexo erc20 token can be used on the platform through staking to gain access to various features. Staking allows users to: receive discounted interest rates for their crypto loans, higher yield on deposited assets, and allows them to receive dividend distributions from the nexo platform.

Provide a brief history of the project.

Previously stated launched in 2017. Nexo provides users with access to collateralized USD loans by providing crypto assets as collateral.

Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

Link any available audits of the project. Both procedural and smart contract focused audits.

  1. https://github.com/EthereumCommonwealth/Auditing/issues/285#issuecomment-503660872

Link to any active communities relating to your project.

How is the applying collateral type currently used?

Briefly explained in project overview but the nexo token to is primarily used to gain benefits on nexo.io through staking.

Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

Unclear to me. The token seems to be the work of a company called Credissimo which seems to have some presence in a few European countries.

Where does exchange for the asset occur?

Exchanged across a few different DEXs and CEXs including uniswap and Huobi

4 Likes

Nexo is both the issuer of NEXO tokens, and also a key MakerDAO vault counterparty. If Nexo itself used this vault type, it would end up feeling sort of like a credit based (unsecured) loan - unsecured lenders would dilute equity/tokens in event of default regardless. It also has unique risks of information asymmetry.

One other thing to consider, it is required to hold the NEXO token within a Nexo wallet to receive any of its benefits (interest/fee advantages and NEXO dividend), so there’s opportunity cost to holding it in a vault as collateral.

2 Likes

True! Although i would point out that there is still potential for customer demand as nexo (the token) has a terrible LTV on nexo.io. On nexo.io, the LTV seems to be ~14.5% meaning that $100 worth of nexo token secures you $14 worth of credit. We would likely be able to beat that significantly, so it stands to reason that there may still be demand from customers that are long on nexo but are looking to extract some short term liquidity from their holdings.

1 Like

@LongForWisdom noticed this guy was missing from the collateral thread starting to think that it may have been forgotten or maybe i am missing something :man_shrugging:?

Let me know either way.

Yep, looks like I missed this one. Apologies for the delay. I will add it shortly.

For future reference please try to make sure you post it in the right categories and with the right tags.

Edit: Has now been added to the Index.

According to Nexo’s site, “Earning in NEXO tokens is available for non-US citizens only.”

Is that expected to change?