Nash Exchange (NEX: $2.19): BUY Rating at $5.07 indicating 131% Upside

Matt Batsinelas
Jun 17 · 13 min read

Amir Almaimani —

Matt Batsinelas —

Disclaimer: We are investors in NEX and will not sell for a week following this piece (not required but for courtesy although we are both long-term holders). Do your own research before making a decision as this is not financial advice.

Investment Thesis

Nash, formerly Neon Exchange, was founded in 2017 by a group of NEO developers aiming to improve the state of crypto exchanges. The 5 co-founders previously co-founded the City of Zion, an open source community for NEO development. Nash’s core offering is its decentralized exchange that leverages blockchain technology to change the financial services landscape. The exchange has a robust stakeholder incentive model centered around its native token (NEX), which is registered as a security in Liechtenstein. Nash will be the first legally compliant exchange to offer fiat-on and off ramps with users having custody over their assets. The company raised $12.25M from a group of traditional investors, including Flybridge Capital Partners and NEO Global Capital, and later raised $21.8M through a regulatory compliant STO (security token offering) for its NEX token. Nash offers several complementary products alongside its exchange including a funds management platform, an extension/wallet solution with over 50,000 downloads, and a QR-code mobile pay app that will enable mainstream commerce transactions.

Our Call: BUY with a one-year PT of $5.07, 131% upside from the current price of $2.19.


  1. Market Demand for a Legally Compliant and Efficient DEX with Fiat Ramps
  2. Centralized Exchanges Leaving the U.S. Market
  3. Nash Exchange Launch with Staking Lowering Circulating Supply
  4. Nash Pay Enabling Mainstream Adoption of Crypto Transactions

Where our analysis differs:

  1. Limited investor attention due to its poor liquidity offers the opportunity to present institutional awareness
  2. DCF and Comparables models showing that the asset is significantly underpriced
  3. Using correct token economics and staking rewards based on conversations with a team member

Team and Key Stakeholders


Ethan Fast, CTO and Co-Founder @ Nash

  • Computer Science Ph.D. from Stanford
  • Founder at Proxino — Y Combinator-funded startup — enables monitoring and debugging client-side of JavaScript.

Fabio Canesin, Co-Founder

  • Research Engineer at Schlumberger — the world’s largest oilfield services company.

Fabian Wahle, Co-Founder

  • Ph.D. from ETH Zurich in Technology Management and Artificial Intelligence
  • Co-founder Altoida (Top 100 Swiss Start-Ups award)

Thomas Saunders, Co-Founder

  • Software Developer at several startups

Luciano Engel, Co-Founder

  • Technical Engineer at several startups


Erik Zhang, NEO Co-founder, CTO of Onchain

Da Hongfei, NEO Co-founder, CEO of Onchain

Muzzammil Zaveri, Partner Gradient Ventures

  • Investor Kleiner Perkins
  • Strategy Tencent
  • Co-founder of Proxino
  • Forbes 30 Under 30


  • Raised $12.25 million from VCs: Flybridge Capital Partners, NEO Global Capital, Connect Capital, Aria256, Badwater Capital, KR1, Fathom Labs
  • September 2018: $21.8M STO for 43.6% of tokens


Several inked partnerships that will integrate NEX token into their networks including Red Pulse, Phantasma Chain, and nOS.

Current Market

  • Hacks have been a huge problem in the centralized exchange landscape. Some of the most notable ones being Quadriga ($135M), Binance ($40M), Mt. Gox (850,000 BTC), Bitfinex (120,000 BTC), Poloniex, (12.3% of its BTC), Coincheck ($530M), and Bancor ($23.5M — claims to be a DEX). With these attacks becoming more common, consumers must be cautious when interacting with centralized exchanges.
  • Most exchanges are currently facilitating the transactions of unregistered securities. Bittrex recently blocked US residents from 40+ crypto assets. Poloniex also delisted 9 assets in the U.S. over regulatory uncertainty. In September, Binance will prohibit U.S. customers — a user base currently responsible for 25% of its volume — from any further trading on its exchange. It is unclear what penalties these exchanges could face for supporting the trading of unregistered securities. Centralized exchanges like Binance (BNB), Huobi (HT), and KuCoin (KCS) and DEXs such as Bancor (BNT) and Kyber (KNC) all have native tokens that derive value from the exchanges’ success (unregistered security risk). Some of these exchanges even conducted ICOs to raise funding (unregistered security offering). Trends to watch will be exchanges trying to become regulatory compliant and the SEC cracking down on exchanges breaking the law. For example, in 2018, Coinbase acquired a broker-dealer license so that it can list security tokens. Also, the only exchange the SEC has taken public action on so far is Ether Delta, who operated an unregistered exchange.
  • DEX liquidity has been a huge issue. While a couple of teams want to aggregate DEX liquidity (Totle, Paradigm), centralized exchanges continue to dominate. DEX’s also have the same scalability issues as their underlying blockchains. Ethereum has become congested before, most notably with Crypto Kitties. Binance’s DEX, launched on its public chain, can only support a couple of thousand TPS compared to its centralized exchange which supports 1.4M TPS. In addition, DEXs do not offer a fiat on and off-ramp like centralized exchanges such as Coinbase, which has limited user adoption.

The Solution

Nash Exchange

Nash’s decentralized exchange, built on the NEO blockchain, allows users to have custody over their funds at all times. The exchange does not touch users’ private keys, which is a huge security benefit. The whole trading experience occurs off-chain through the platform’s “matching engine”. Regarded as the heart of Nash’s product offering, the platform’s matching engine is essential for overcoming speed restrictions that arise during blockchain-based transactions. The matching engine also allows for matching trades across multiple chains, which captures Nash’s ability to integrate features of centralized exchanges into its decentralized framework. The exchange can support up to 10,000 requests per second, which is much faster than existing DEXs.

CIO and Co-founder at BlockTower Capital

In addition to its cutting-edge technology, Nash distinguishes itself from other DEXs through its fiat on and off ramp, allowing users to buy assets with different national currencies on the exchange. Rather than having to use Coinbase to trade altcoins on Binance, users can do it all in one seamless experience. The user interface is simple to navigate and offers both basic and advanced trading features. As previously noted, the exchange will also feature cross-chain trading, an advantage over other DEX’s that only offer trading pairs for one chain. At launch, the exchange will support market and limit orders but plans to offer margin trading in the future. The exchange makes money off of taker orders but does not charge for maker orders. The chart below provides a further breakdown of Nash’s proposed fee structure.

Nash Funds Management

Another key feature of Nash is its funds management platform that allows users to track the movement of their funds and make budgets. Nash will support a number of blockchain wallets across different chains. However, its zero-knowledge key manager allows users to control their funds. This tool provides users with a clean UI to track their balances, trades, deposits, withdrawals, and portfolio growth.

Nash Extension

Nash’s extension simplifies the Web 3.0 experience. With over 50,000 downloads, Nash’s extension allows users to connect their accounts to dApps and websites integrated with Nash. It supports multiple chains and lets users store assets, make payments, log in to various accounts, and sign smart contracts. The extension will directly compete with Metamask as Nash integrates with more services. Nash’s extension features an address book that acts as an identity management system, users also can claim or stake their tokens and see their transaction history all within the browser plug-in.

Nash Mobile and Pay

Nash’s mobile solution allows users to trade and pay crypto from their mobile devices. Nash Mobile offers a hot wallet and lets users seamlessly connect to its exchange. Nash Mobile will also include Nash Pay, which features a scannable QR-code and automatic currency converter to make payments. Nash Mobile will allow users to send money to one another as easy as Venmo and Square’s Cash App. It also allows users to pay for goods online. Nash Pay does not charge any additional fees beyond trades on its exchange.

Nash Exchange Token: NEX

Note: 3.2M of the public ICO tokens were not sold and went back to the team.

The NEX token is a profit-sharing token for the Nash ecosystem. Similar to other staking coins, NEX allows participants of the network to receive a percentage of fees generated via trades conducted across the platform’s matching engine, which includes not only standard trades on the exchange but also currency conversions taking place on Nash Pay. The staking mechanism does not pay out the native token but rather pays a proportion of tokens trades on the exchange. For example, if someone is trading BTC to buy ETH, the stakers will get a portion of the fees paid in BTC. The base fee-share rate is 25% for a minimum staking period of one month, increasing to 75% if the holder commits to stake for two years. The dividends are paid on a monthly basis and users can choose to automatically convert dividends into a single asset. Issued on the NEO blockchain, NEX is a NEP-5 token. NEX is Europe’s first digital security as it was approved by the Financial Market Authority (FMA) in the principality of Liechtenstein. There are a total of 50M NEX tokens in creation. 21.8M of these tokens were sold via a heavily oversubscribed public sale (over 100,000 registrants were not selected in the lottery) for $1/NEX. The other tokens were reserved for the team, partners and other important stakeholders.


Technical Analysis

Regulatory Approach

Valuation Scenarios

Link to work and assumptions


The crypto world appears to still be missing a reliable, efficient and legally compliant decentralized exchange. Safety and efficiency are two essential pillars to the mass adoption of crypto activity in mainstream finance, which is a void Nash’s revolutionary product is looking to fill in the future. The platform’s focus on developing an ecosystem that abides by all legal rulings of financial regulators, allows users to have complete autonomy of their funds, and, most importantly, offers a UI/UX that mirrors top centralized exchanges of today truly sets Nash apart from other competitors in the market. The additional feature of fiat gateways will only simplify the purchasing of digital assets, in turn inviting an even greater base of users to the crypto space in the future.

2. Centralized Exchanges Leaving the U.S. Market

As previously mentioned, major centralized exchanges including Binance and Bittrex will be blocking US customers from all trading activities by September 12th of 2019 due to compliance with the SEC. Binance is currently responsible for 65% of the total real volume in the crypto space, with 25% of its users presently based in the United States. Assuming those 25% of customers are fully removed from all Binance trading activity, upwards of $15 billion in monthly trade volume will be made available for competing exchanges in the United States. The limited number of compliant exchanges in the US today and the even fewer number of compliant exchanges that offer on and off-ramp fiat gateways for altcoins will allow Nash to make an immediate impact on the US market upon launch.

3. Nash Exchange Launch with Staking Lowering Circulating Supply

Nash Exchange’s staking feature, where tokens are locked into smart contracts in exchange for monthly dividends, will have a dramatic impact on the tokens circulating supply and, in turn, the value on the secondary market. Considering the already scarce supply of tokens, NEX could experience significant price growth as a result of the project’s current staking model. Founder Fabio Canesian noted that the team would possibly consider a token split in the long term if individual token values exceed $200; however, this is simply an idea at this time.

4. Nash Pay Enabling Mainstream Adoption of Crypto Transactions

One of the main problems of crypto adoption has been merchant acceptance. Nash Pay looks to overcome this hurdle with a simple QR-code that merchants can scan. This will create a seamless experience for both the user and the merchant. Moreover, friends can send crypto to each other as easily as they can add one another on LinkedIn or Snapchat via QR-codes. WeChat has been a leading player for QR-code payments with fiat currencies, and we believe Nash’s infrastructure is best positioned to have a leading edge with cryptocurrency payments, setting up huge growth opportunities for the exchange.


Despite its exceptional work on the fronts of technological innovation and compliance, the Nash team appears to lack a definitive GTM strategy at this time. The only noticeable effort to attract customers to its product offerings as of today is its BTC and NEX giveaways for those that pre-register for the exchange. The inaction thus far could stagnate the platform’s ability to effectively capture market share, which is crucial at this time given this “power vacuum” in the crypto exchange space. With Binance expected to lose as much as 25% of its volume once its U.S. customers are removed from trading activity, Nash runs the risk of missing out on capturing this market if it fails to turn its attention to establishing an effective strategy. It is worth noting that Nash has amassed over 68,000 followers on Twitter, but again, the marketing team has been rather quiet in actively promoting the Nash brand.

Counter: The limited focus on marketing and can be attributed to the company’s prioritization of compliance. Unfortunately, the crypto-space has become synonymous with “pump and dump” schemes, thus steering many prospective investors clear from backing projects with true potential. Nash Exchange looks to distance itself from this perception by refraining from major marketing initiatives until its product officially launches to the public. 32,000 new users have already pre-registered for Nash as a result of its referral program. Combined with participants in the token sale, Nash has a potential 200,000 customers already familiar with and interested in using it at launch.

  • Liquidity

Top exchanges in today’s crypto space are holding back from listing NEX on their platforms due to its status as a security. The lack of liquidity resulting from this has raised the question of whether NEX is properly priced on the illiquid exchanges currently offering the token. Although it is more likely that the illiquidity is suppressing the token’s price, there is a possibility that NEX experiences a drastic price drop once offered on a more liquid exchange due to investors dumping excess tokens. Token illiquidity, therefore, is a risk prospective investors should consider when exploring the idea of purchasing NEX on the secondary market today.

  • UI/UX expectations not met

Nash has set the bar high for its UI/UX experience. They claim that the DEX will have the advanced features and seamless experience that centralized exchanges have, which is something we have not seen to date. Nash also claims to offer smooth fiat ramps and advance trading options, which is something that DEXs have lacked before. If the experience is subpar of a centralized exchange, users may stick to trading on exchanges they are already familiar with. Moreover, we have only seen pictures of the exchange and have not beta tested it ourselves, so we are speculating on its high performance.

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