In the crypto space, there are people who prefer hodling and people who prefer trading on a regular basis – just like any other asset class. No matter which type of investor you are, you probably have idle stablecoins and cryptocurrency lying around – not generating passive income for you. There are several defi solutions that can help you yield farm on your idle assets and today we are going to talk about NEXO.
The reason I would like to share about NEXO is due to its ease of use and simplicity. All you have to do is send in your crypto assets into your NEXO wallet address (please double-check the address before sending) and you can start earning interest paid out daily. The interest rates are attractive at up to 5% (4% without NEXO tokens) for crypto-assets and 10% (8% without NEXO tokens) for stablecoins with a flexible term. The returns surpassed most, if not all, traditional banks fixed saving plans.
Furthermore, all custodian assets are stored in cold storage via BitGo and they have 100M insurance on our assets. NEXO has processed over US$ 1.5billion in loans since 2017 for over half a million NEXO users, which further adds to its credibility and gives you a better sense of security while yield farming.
Your deposited asset will also add to your credit line which you can spend via the NEXO card (coming soon) or withdraw fiat into your bank account. Personally, I would not recommend spending on your credit line unless you have access to the NEXO prime rate at 5.9% (otherwise it is higher at over 10% per annum).
Generating passive income while waiting for capital appreciation of any asset has been the holy grail of investors for centuries. I have placed some assets (ETH, XRP, USDC) into NEXO and will be sharing with you updates on the interest payout after a couple of months.
Despite all the positives, I would like to highlight risks you must be mindful of when yield farming with NEXO. They are still a relatively young company set up in 2017 by Credissimo (fintech company established in 2007 with over 12 years of fintech success). Interest rates might also fluctuate more frequently than traditional banks, and you should monitor closely if the returns become unattractive. One final note for those that still decide to leave your assets idle, do remember to store them in hardware wallets for maximum security!
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Note: This article is a guest post.