Interview by Crypto Rand with Antoni Trenchev, Managing Partner at Nexo
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How would you describe the main pillars of the project?
I could throw in a few punchlines in here to impress the audience but what it all ultimately comes down to is two things — hard work and a very clear vision for what we want to accomplish. The beauty of our model is its simplicity and efficacy of the execution. Secured lending is probably the second oldest profession in the world and is what we have been doing for over 10 years now with our other company — the leading European FinTech group Credissimo.
I do believe that people should do what they do best and in our case, that would be automation of lending processes, which is quite nicely aligned with what blockchain is all about. It is quite interesting how Nexo came about — we were faced with a real-world problem ourselves as users, namely the inability to borrow against your cryptocurrencies. This was especially frustrating as, quite frankly, we crypto asset holders generally do not like to sell our coins and tokens.
For this predicament, Nexo has developed a simple, yet elegant, functional and fully automated platform. The rest really is a lot of hard work to accomplish our vision of becoming the de facto lender for the crypto space.
We have what I believe to be an extraordinary work ethic at Nexo. Sixteen hour-work days are the norm and at least the partners, I can assure you, even dream of all things Nexo at night (laughs).
Not saying this to either boast or complain, it is just reality. But the feeling of seeing results come in so quickly is a very gratifying one. The Nexo platform effectively offers our clients the best of both worlds — HODL-ing their crypto assets and at the same time, it gives them access to instant cash.
Even more so, given the fact that Nexo is one of only a handful of projects in the blockchain space that actually has a live product which solves real problems for the blockchain community.
Nexo’s instant crypto-backed loans are flying out to borrowers every day and our clients are beyond happy with the lack of burdensome procedures, credit checks, approval times, etc. They simply deposit their crypto in a Nexo Wallet (multi-signature cold storage wallet provided by our partner BitGo, Goldman Sachs-backed custodian) and instantly get a credit line from us. They can start spending immediately.
Furthermore, it is important to know that Nexo is adheres to all relevant European legislation. We believe that the increased oversight is positive for the crypto industry since it begets transparency and sustainability. We realized early on that working as a compliant organization, especially in the FinTech sector, is of utmost importance for our clients and investors.
In my not-so-humble opinion, the fact that we have over a billion dollars in loan requests speaks quite unequivocally that we are on the right track.
About the team and supporters, what are your strengths?
A lot of great talent over at the helm of Nexo — Kosta has terrific analytical abilities to see the bigger trends and sharp business acumen to respond to them in the most efficient manner; Georgi is perhaps the most methodological and diligent person I know when it comes to finishing a mission and he is a real “Excel wizard”; Kalin has over 25 years of experience in investment banking and is one of the toughest sales people ever. I could go on for quite a while, suffice it to say — we all got interesting and diverse qualities.
What ultimately binds Nexo together is our passion for what we are doing, the stamina to see it through and more than 10 years of expertise in the credit facilitation space, add on top hundreds of millions of loans provided and millions of happy clients across Europe.
True — humility might not really be our strong suit, but as Rand has pointed out herself “The man who does not value himself, cannot value anything or anyone.”
Thinking about the future, do you have any roadmap with relevant upgrades or partnerships?
Not only that but our roadmap is a key element of our whitepaper and has been instrumental in raising some $52.5 million earlier in 2018.
We abide by the adage “promise but overdeliver”, as it is important to us to move fast and release features on or ahead of schedule. What separates us from most everybody is that we never sacrifice quality. You can see our track record and judge for yourself — never have we not delivered anything on time that depended on us.
We are putting out new features all the time, upgrading our platform which is growing and expanding together with the overall market. We are listening closely to our clients and our community, which is, by the way, one of the largest in the crypto space. Nexo does its very best to respond to the demands and truth be told the clients have been an invaluable source of great ideas. Recently, thanks to our experience in automation, we have decreased our minimum loan amount to $1,000, doubling the maximum amount to $2,000,000 in the same breath, as per requests from the Nexo community.
Looking towards the future, a very big milestone is upon us now — the Nexo credit card. With the Nexo Card, clients will be able to pay for goods and services as soon as their collateral is confirmed on the ledger. Absolutely no wait time, no old-fashioned bank transfers. This is revolutionary, and quite surprisingly — no one else is doing that. The competition does not even have that on their roadmaps!
I could go on about upcoming things but that would rob us of the opportunity to have another sit-down.
What’s the added value of Nexo in comparison with other competitors?
This is a multi-faceted question, so let’s unpack the layers there. For one, as mentioned, Nexo is the result of over a decade of experience in the credit space. Owing to this, we have approached the entire project in a fundamentally different way. Recent troubles at some of our competitors quite clearly show that running a credit facilitation business is not so easy after all and raising successfully tens of millions of dollars via an ICO might end up being detrimental in the end if you are unsure of what you are doing. That’s why we suggested to help out in the most friendly manner, as we want to make sure that people can borrow effectively against their assets rather than sell them.
Our process automation expertise is rivaled by few and hence our platform provides instant crypto-backed loans, the emphasis being on “instant”. No one else is nearly as fast as us. You can check out the plethora of testimonials of happy Nexo customers on Twitter. Most companies in the crypto-lending space deploy archaic manual processes and receiving their loans can sometimes take weeks! The 21st century is fast, the blockchain space is even faster. Fewer and fewer people are willing to wait for something they believe should be instant and distributed technology proponents are amongst the most impatient ones. Speed and efficiency, eliminating unnecessary middlemen and the freedom to structure your finances as you see fit — these are some of the reasons why Satoshi came up with bitcoin in the first place. An ambitious endeavor that turned out to be quite successful.
I would also say that we too are ambitious, certainly much more than the competition. Most of them confine their vision to lending against crypto assets and even in it, they do not push the boundaries. Some focus on one or two markets, others on one or two currencies (usually either USD or EUR). Nexo is running a truly global operation with a clear plan of how to service every country and in every currency. We want even the most far-off regions to be able to use Nexo and receive their loans in the currency most relevant to them.
On the grand scheme of things, you know we are the only ones looking to acquire a bank in the US and clear a banking license in Europe. Both are progressing quite well and these steps open up enormous possibilities. Unfortunately, I cannot disclose more details, as I am getting a little annoyed by copycats who muddy up the lending space.
What are the use cases you are looking to cover?
In the broader sense, we offer digital asset holders immediate access to liquid funds without selling. This allows them to keep the ownership over their holdings and enjoy any potential future appreciation of their value, so anyone really who has crypto assets is a potential client.
So let’s say you a crypto miner who wants to stay competitive and expand their operations. You have expenses for hardware — from the mining machines themselves to storage, cooling, maintenance and anything related. Electricity bills you said? That too, can’t pay them in crypto just yet. So, to stay competitive, miners often resort to the liquidation of mining rewards. However, they could now avoid such a situation by opening an instant loan with Nexo, placing their cryptos as collateral.
Or a hedge fund who has investments in digital assets, ICO tokens or others. Often times, such funds want to take advantage of new investment opportunities but they’re strapped for cash. Now, they could leverage their portfolio and receive an instant loan.
Similarly, crypto exchanges and trading platforms could use Nexo’s loans to finance their margin lending and trading services.
Recently we have seen an influx of interest in our service from companies who have conducted ICOs. They believe that it is much better to borrow against the crypto they received, rather than sell it, and I agree.
The list goes on and it will continue to expand as more assets find their way to the blockchain to be traded cost-effectively and swiftly. This is true for stocks, options, ETFs, ETNs, bonds, commodities and real estate alike. Projections have the total value of tokenized assets to reach $5 trillion by 2025, so in other words, use cases are appearing on quite a regular basis.
How are you aiming to provide scalability to your service?
We think about that a lot since we have over a billion dollars in loan requests that we need to match. Nexo is exploring several avenues here.
We already talked a little bit about our plans to acquire an FDIC-insured US chartered bank. This would provide us with access to additional very affordable financing via the depositing system. So to sum it up in two word — becoming NexoBank. Already got the domain nexobank.com (laughs)
Another alley would be the structuring of a fixed-income financial instrument based on our asset-backed loan portfolio. That is something that our institutional partners like a lot as there are hedge funds, pension funds, etc. who seek exposure to crypto with the promise of regular returns. This concept provides Wall Street with an entry into the crypto world, a development we are experiencing already. Serious Wall Street money is what we believe will bring about the next leg up and elevate the total market cap of crypto well beyond $1 trillion in the very near future.
Ultimately, and interestingly, we are talking to more than 40 crypto companies who have applied to have their coins accepted as collateral on the Nexo platform. This, in turn, opens up a wealth of growth opportunities as many of those companies have shown interest in providing financing for Nexo to issue loans backed by their respective tokens.
Evaluation of the current scenario for NEXO and the blockchain industry.
I have always liked the saying that predictions are very hard to make, especially those regarding the future. Nexo is, of course, super bullish on both our NEXO Token and the overall blockchain space. I mean, seeing the dynamics of Nexo, the way our product is appreciated by the clients, the feedback we are getting about the user-friendliness of the platform, the millions that are flying out to clients daily and the excitement about the new things that are coming up like the Nexo Credit card. All this makes us super confident that the NEXO Token will outperform significantly any other coin with similar specifics and the overall market for that matter.
The crypto space has been self-regulating, I would call the decline since January 2018 “a significant cleanup”, long overdue in my opinion. After all, more than 1,000 ICOs are already dead in the water. But we see the blockchain space maturing and this is a positive development. Regulators have not overreacted to the challenges to the status quo, which was one thing that got me personally worried in 2017 and early 2018. More forward-looking jurisdictions like Malta, Switzerland, Gibraltar, not to leave anyone out, have developed legal frameworks with concise, business-friendly rules which is all real companies within the blockchain space could ask for. As a team with over 10 years in the lending business, we want to be given a clear regulatory landscape so that we can operate compliantly and so that our investors and clients can interact with us with full confidence.
Bottom line, good times are upon us. Fortune favors the brave or as it is more colloquial these days — fill a bag!
