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What a week this is turning to be. Full of twists and turns! There is a sense of regulatory maturity and acceptance in a way. From XRP, Ripple Inc., Cardano, Bitcoin and now Venezuela, it couldn’t be better for value-searching and relentless crypto traders. 

It may be XRP’s partnership with BitPay, the development in Cardano via Shelly Testnet launch, and Venezuela’s progression towards a more open cryptocurrency society. But what of other low risk, high reward, low to medium cap digital assets that have a well laid out roadmap and valuable partners? 

In week’s speculator’s notes, we identify two such projects that I’m convinced is worth a second look in Q4 2019. One thing though: Beware that this is not investment advice, neither am I endorsing any project. Do your due diligence and base your investment decisions on solid and well-researched findings. 

So, which projects are these? Well, let’s get started:

NEXO

Think about it, there is a wave of fiat debasement around the world. The FED, the ECB and other central banks are slashing interest rates and purchasing more assets to salvage their respective economies. With QE and preventive monetary policies, owning cryptocurrencies is a strategic, risk-averse move. 

Why? Digital assets are immune to these interventionist stuff. How Bitcoin behaves during periods of economic crisis is leading, and Nexo found an opportunity. Nexo is a blockchain-based overdraft system based in Switzerland and has a partnership with Credissimo. 

Credissimo are veterans in finance. While that is a huge plus, other well-thought out factors as automation where loan APRs are calculated via their Nexo Oracle, and insured funds are stored by BitGo in an audited Ethereum smart contract, it is their transparency and their thrive to dominate the cryptocurrency lending sub-sector that is ticking.

Guys, Nexo is a security, compliant with SEC’s rules and there are audited financial statements as part of their compliance. Token holders, aside from enjoying capital gains also receive dividends. Recently, Nexo distributed $2.409 million as dividend-with the obvious trend that these allotments keep rising.

I’m bullish on $NEXO because:

  • People will continue to borrow funds regardless of the base currency. It is just how the world operates. Willing lenders, willing borrowers agreeing on a determined interest rate. That demand alone plus Nexo’s global reach-and ease of borrowing, and the infancy of the industry means $NEXO could be highly undervalued at spot rates. Just to quantify, Nexo has distributed over $700 million to over 200k across the globe since launching. 
  • There are heavy weights involved. Credissimo is behind Nexo but their decision to rope in a qualified custodian in BitGo means token holders-and those lending their coins, are guaranteed of security. As it is there are security concerns in the space stemming from the decentralized nature of crypto operations. Few people can shoulder the responsibility of securely storing their coin’s private keys. When lending, that responsibility is shifted to Nexo who in turn passes that baton to certified experts.
  • They have launched a mobile app for clients. This further complements their work of building the Utilities 2.0 for NEXO tokens. Upon completion, there will be a plethora of amazing features for clients. However, that’s not forgetting their partnership with Terra that will further thrust them into the spotlight in South Korea.
  • More and more coins are being supported for lending. TRX was the latest. Furthermore, lenders can earn interest on Euro, USD and GBP, and even stablecoins–USDT, TUSD, USDC, PAX, and DAI. Interest rate is 8% APR on stablecoins, how can’t that be attractive? Cool thing about this is that there are no hidden fees neither are there minimum repayments. Just recently, LTC was recently added as a loan repayment option, widening options for borrowers.
  • Nexo will be listed at Binance DEX after receiving majority votes. Earlier, they had sent for a proposal for listing.

For more fundamentals check our long format review here: https://cryptogems.com/nexo-worlds-first-instant-crypto-credit-lines/

Telcoin (TEL)

We wrote a long format post on Telcoin here

It is not rocket science that remittance companies charge exorbitant fees. But there is good news. The penetration of the internet has been a reprieve, and recent statistics attests to this. It has contributed to financial inclusion, and Telcoin is right in the middle of this revolution. 

Telcoin does what they know best: incorporate mobile operators for financial inclusion and eliminating previous pain points of KYC, trust and reach. There move was strategic, taking advantage of the high rate of mobile penetration in developing countries. Leveraging this fast-tracks their drive of offering cheap remittance which fosters financial inclusion. 

Because of this, mobile money subscribers can send, buy, and sell Telcoin tokens with the operator as the intermediary. TEL are distributed to Telco partners depending on their level of adoption, promotion and integrity. There is a strict issuance model in place for this purpose.

Remittance and ecommerce are multi-billion industries, and Telcoin is merging two of the world’s disruptive developments in blockchain and mobile technologies. There are challenges, yes, but they are progressively moving towards their objective. 

I’m firm on $TEL simply because of:

  • The media attention it has been receiving in the last couple of months is enough to justify what the future holds. Since their objectives are clear and are desirous of playing crucial roles in ecommerce, financial inclusion and remittance, their reputation and their capable platform-it can handle 5 billion subscribers, could pump TEL valuation. Presently, TEL is in the top-200 of the world’s most valuable coins, out of the 2,000+ digital assets.
  • Pure mathematics: While there are 100 billion TEL as total supply, 50 billion has been set aside for telecom partners and operators and spread over 10 years issued according to a laid out model mainly depending on demand. Since they are issued freely to mobile operators, telecom partners will be incentivized to sell them to their subscribers as they will receive all profits. The other 50% are locked in exchanges. To further curb volatility, there is an option of locking prices for a period—a very attractive feature. 
  • They recently partnered with Paga, a Nigerian mobile payment provider that transacts over $500 billion with over 800 merchants. Besides, a partnership with one of the Philippines leading payment app issuers could be on the cards thanks to their meeting with Kenneth Palacios, the Vice President of Consumer & Trade Wallets of PayMaya. PayMaya’s objective is to build a cashless ecosystem, allowing business owners to pay online in seconds via any credit, debit, or prepaid card, or using their PayMaya app.
  • Telcoin were recently approved to provide remittance services from Australia. That is massive and bodes with their plans of opening up various payment corridors from the Philippines where they received a BSP VCE License. 

For more fundamentals check our long format review here: https://cryptogems.com/telcoin-tel-send-payments-to-a-mobile-number-for-real-crypto-adoption/

I hope this was informative for you. Never miss crypto investor insights by subscribing to our mailing list.

Thanks for reading and good luck everyone!


How is your crypto doing?
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How is your crypto doing?
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The Background of Lending

Lending, the act of transferring excess wealth to those who can put it to work is as old as the invention of money itself. Records show that lending pre-dates the Roman and Greek cultures and was actively practiced by Mesopotamians. Like today, there were stringent rules guiding how borrowers and lenders co-existed.

Obviously, there has been an evolution thanks to the technological breakthroughs from the 80s through to the early 2000s. Needless to say, the needs of borrowers and lenders are pretty much the same: use these loans to fill a gap.

Like the way it has been since time immemorial, the modus operandi is pretty much the same. The lender extends excess capital in his/her position to the borrower with the trust that the latter would pay back on time and with interest or whatever rules there is to the binding contract. Often, and this is because of opportunity cost, interest will cushion the lender from inflation and other principal wiping movements. Meanwhile, the loan forwarded to the user, regardless of the mechanics guiding their arrangement, will help foster growth in one way or another.

With the same premise of lending that, there has been change. However, the fundamentals of, and attitudes towards the same is constant. From the Code of Hammurabi to the CDOs (Collateral Debt Obligations), largely blamed for the bubble of the Great Financial Crisis (GFC), and the advent of cryptocurrencies, lenders and borrowers will be always be part of the process for the benefit of all.

In the age of blockchain and cryptocurrencies, holding of valuable digital assets is yet another reason for loaning out the excess in the quest for profitability and liquidity. Of the many cryptocurrency lending platforms, Nexo is a standout. For simple reasons.

Introducing Nexo

Nexo, powered by Credissimo, is a blockchain-based overdraft system where users can instantly borrow short term cryptocurrency loans based in Zug, Switzerland. The platform is automated and users-including hedge funds, miners and general investors, simply deposit supported coins in the Nexo wallet and receive instant cash loan in fiat.

Nexo Business Model

Besides, interested parties can deposit coins-only on EUR, USD, GBP and stable coins as of writing, and earn daily interest from their idle assets. The terms of the loans are spelled by the Nexo Oracle and stored in an audited Ethereum smart contract. While at it, the deposited collateral is secured by BitGo and insured. Some of the platform’s unique features include the lack of credit check, no hidden fees and users need not to pay capital tax gains.

Reasons for choosing Nexo

The Nexo Oracle

Nexo Oracle

The Nexo Oracle is the heartbeat of the platform, governing how loans are distributed, monitoring processes and for data analytics. To determine the credit worthiness of a borrower, it uses a Loan-to-Value ratio (LVT) to the platform’s legacy lenders taking into consideration several variable including market liquidity and depth.

If the Oracle calculates your LVT ratio and finds that it is 50 percent of your deposit, then if you agree to the terms and conditions, you’ll be loaned half of your deposit in fiat.

Interest rates, in APR (Annualized Percentage Rates) are automatically determined by the Oracle, and annualized. However, if the price of the underlying asset drop by half, additional crypto deposit will be required through a margin call.

Nexo supports over 20 cryptocurrencies and tokens. Introducing flexibility, borrowers have an option of repaying in ETH, BTC, Euro, USD and NEXO, the platform’s native ERC-20 “restricted securities” token marketed as SEC-compliant under Regulation D Rule 506 (c). Different from other platforms, token holders receive proceeds from Nexo’s profitability, divided proportional to the owner’s token balance.

Team

Nexo Team

Running Nexo is a dedicated team led by Antoni Trenchev LL.M, the co-founder. Prior to joining Nexo he was the Chief Innovation Officer and the Member of the Advisory Board at Credissimo. There, he was the head of Fintech strategy and concurrently advised on AML and KYC rules. Similarly, Kosta Kantchev, a co-founder. Like Antoni, he was the member of the Advisory Board at Credissimo.

Georgi Shulev is yet another co-founder. He’s an expert in banking, drawing useful experiences from Unicredit Bank Austria, Lehman Brothers, and the European Investment Bank.

Nexo Team

Evidently, Nexo has continued to flourish over time and at the moment, there are over 120 employees as Vasil Petrov, the CTO, George Manolov the business development head, Teodora Atanasova in charge of Business Development & Investor Relations, Ivan Kostov in the marketing department and Vasil Stoilov who’s in charge of risk management.

Advisors are Michael Arrington, the founder of TechCrunch and Arrington XRP Capital. The Arrington XRP Capital is perhaps the world’s first digital asset management fund that is denominated in XRP and incorporating xRapid in their processes. Michael has been voted on more than one occasion as one of the most powerful individual in the internet.

Trevor Koverko, the founder of Polymath. Through Polymath, Trevor plans on porting the multi-trillion securities market on the blockchain by the latter being a platform where startups can issue compliant securities token. Lastly, there is Paolo Tasca, the Executive Director of University College of London Blockchain Center.

Roadmap

Behind Nexo’s drive is the team’s ambition of solving inefficiencies in the lending market. Coming up with innovative and convenient financial solutions while leveraging the blockchain, Nexo’s is gradually becoming a solution to projects’ or individuals’ financing needs in a new digital economy.

The first Airdrop campaign was completed in Feb 2018. By March they had finalized their token pre-sale. In April, they completed their main token sale, launched their operations, lending out USD with ETH and BTC as security and the token was listed in several exchanges. In May, the initialized the process of acquiring a FDIC insured US bank, offered Euro support in June and in July launched the Nexo Credit Card.

By Q3 2018, they had automated their KYC, offered support of several cryptocurrencies, launched a Nexo mobile wallet and introduced an affiliate program. By end year, they had increased their overdraft limits and issued their second air drop.

In Q1 2019, they finalized their acquisition of the FDIC insured US bank, launching depositing accounts in the process.

Partners

Nexo Partners and Membership

As a regulated financial institution, Nexo has several strategic partnerships. Through their deal with BitGo, deposits are secure. For KYC, AML and any form of compliance, Confiado ease the process. Meanwhile, their collaboration with Securitize “and the integration of the DS protocol allows for tokenized securities issued by Securitize to be staked as collateral for Nexo’s instant credit lines, proves an incredibly powerful utility to trillions of dollars’ worth of traditional assets. Besides, Nexo works closely with UCL CBT and TrueUSD, which is “money built for the new global financial system.”

Nexo is a member of several associations including the Enterprise Ethereum Alliance (EEA), the Bitcoin Foundation, Crypto Valley, Swiss Finance + Technology Association and Bitcoin Association Switzerland.

Token and Fund Distribution

Aforementioned, Nexo is based on the Ethereum platform and therefore its native token complies with the ERC-20 standard. According to Nexo, their native token, NEXO, would be used to retain loyal customers through multiple airdrop campaigns and to incentivize customers and supporters. Each NEXO token bears dividend-paying features. As a utility, there will be a discount for borrowers who repay loans in NEXO.

Nexo dividend Token

Even so, the token is traded as a restricted security following the application of Nexo to the SEC for exemption. For successful launching, the team needed $52.5 million, the hard cap, which they crowd funded in an initial coin offering that took place from Mar 6 to April 1 where KYC was mandatory and investors from China barred.

Nexo ICO Summarized

During the main token sale, each token retailed at $0.1. In total there were 525 million NEXO tokens available for investors. The 525 million translated to 52.5 percent of the total token generated fixed at 1 billion. Of this, 25 percent was set aside for Overdraft Funding Reserves, 11.25 for founders and vested quarterly, 6 percent for the community and Airdrop campaigns and 5.25 percent to meet the need of Advisors, Legal and general PR. BTC and ETH were the only accepted coins during the public sale.

Nexo Token distribution

Fund Distribution

Nexo Fund Distribution

From the collected funds, 80 percent will go towards crypto overdraft funding, 8 percent towards IT development, 7 percent to cater for operational expenses and 5 percent towards marketing and growth.

ROI and NEXO Performance

Nexo ROI and Price Performance

Available in several exchanges as HitBTC, Hotbit, Mercatox and Yobit, NEXO’s 12-month volatility is 125.82 percent. Its maximum draw down is 91.61 percent and it is 12 month ROI-from launch and trading is 26.29 percent.

However, the ICO ROI is -27.05 percent at spot prices. The token’s market cap is $40,849,737, trading $5,055,616 in 24 hours, adding 3.75 percent. There are 19,048 NEXO holders and there have been 152,611 transfers even though the coin is down 23.59 percent against ETH but up 93.88 percent against ETH in the last year.

Short term Price Catalysts

The success of any lending platform depends on its ability to deter hackers and keep customers’ deposit secure. Nexo has that covered. Through their partners as renowned SEC-approved custodian, BitGo and Confido, the platform can assure customers of their assets’ safety while keeping track of borrowers.

The second gauge has to the speed of approval and disbursement of loans. Because of automation made possible by smart contracts and the Nexo Oracle for LVT calculation, Nexo has been successful distributing over $700 million from their wide customer base exceeding 200k.

Nexo User Review

There is diversity. Nexo’s customers are global, spread over 200 jurisdictions from where over 45 currencies are supported. Cumulatively, there are over $1 billion instant loan requests placed on the platform.

Drawing from this, it is no surprise that they are planning to launch a mobile app for iOS and Android, and later a Credit Card for their European clientele to even better the customer experience. Last month, they added TRX as one of the supported digital asset customers can borrow instant loans from. Recently, they paid out $2.409 million as dividends for token holders from where each NEXO token drew $0.0033 as dividend. There was no withholding tax imposed.

Nexo Dividends Explained

On top of this, Nexo is working on Utilities 2.0 for the NEXO token. Upon finalization, the token will bring a plethora of new amazing utility features, drawing demand for the token with “better interest rates on all Nexo products Premium features and functionalities Nexo Card cashback.”

Long term Price Catalysts

The confidence for investors is from the quality of the Nexo team. Before diverging and settling on the blockchain, they played key roles in Credissimo. Likewise, the involvement of Michael Arrington, an influencer in the crypto world and the head of a hedge fund denominated in crypto is good news. That is perhaps the steam that keeps the team going.

At the time of writing this changing hands at $0.072250, but given the trend of the crypto lending market, projected to attract more users and even balloon to their trillions in coming years, Nexo investors will not only benefit from superior return on investment but from the low APR as they would be  categorized as loyal and incentivized better.

Nexo Trillion Market

Presently, their APR is 5.9 percent per year while lenders can earn the same interest rate on stable coins as TrueUSD, one of their partner, but plans to expand that to BTC, ETH and even XRP.

Further, their strategic partnership with Terra to expand the cryptocurrency market in South Korea, from where Nexo has a huge following will further cement Nexo as a leading crypto lending platform in the world. In their deal, the Zug-based crypto lending platform will accept Terra token deposit from the soon-to-be launched lending platform focusing on the SE Asia market.

Already, Nexo has a partnership with TrueUSD but the deal with Terra, a stable coin that incorporate algorithm to maintain the price of its token at a desired rate via another token, Luna, impressed Nexo’s executives.


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