Nexo, a leading cryptocurrency lending platform and exchange, has introduced a new feature on its platform — the Nexo Booster.
Launched earlier this year as part of the Nexo app, the Booster is now set to bring more functionalities to the platform’s web users and enable them to grow their holdings further.
The Nexo Booster brings leverage trading to the platform, enabling users to buy up to 3x the amount of the asset they want.
The company says that the Booster is an industry-first product that allows users to amplify the purchasing power of their current holdings without allocating additional capital.
Fully collateralized leverage with Nexo Booster
What makes the Booster different from other leverage products on the market is its hybrid design. In essence, the Booster shares identical features with the Nexo Exchange and the Nexo Instant Crypto Credit Lines, allowing it to execute, borrow and exchange transactions automatically with no slippage.
The feature enables users to get between 1.25 and 3x leverage on their portfolios through the Nexo Instant Crypto Credit Line. Leverage via the Nexo Booster works by collateralizing the user’s existing holdings and the assets the user acquires through the booster transaction. This makes the entirety of the user’s credit line fully collateralized and brings the loan-to-value (LTV) ratio to 70% or under.
The LTV of a booster transaction determines the height of the fees, which range from 1% of an LTV of 50% or less to 3% for an LTV between 60% and 70%. As the Booster uses the infrastructure of the Exchange and Instant Crypto Credit Lines, users receive up to 0.5% exchange loyalty rewards on every transaction.
There are 28 currencies available in the Nexo Booster — BTC, ETH, XRP, LTC, EOS, BNB, XLM, PAXG, LINK, TRX, ADA, DOT, AXS, MATIC, MANA, SAND, UNI, AAVE, GALA, CRV, 1INCH, FTT, SOL, AVAX, FTM, ATOM, KSM, and NEAR.
While the platform has set a maximum of $250,000 per booster transaction, users are able to make as many transactions as they want. Having an open credit line doesn’t prevent users from using the Booster. However, it’s important to note that an open credit line will change the LTV for the booster transaction.
Each of the 18 cryptocurrencies that can be used as collateral in the credit line has a permitted LTV, with Bitcoin having the highest at 50%. The Nexo Booster has a single permitted LTV for all coins set at 70%, allowing users to borrow more against assets that would otherwise have a low available LTV.
Aside from the new functionality, it provides to the platform, the Nexo Booster also brings an additional level of security. While the Booster is technically similar to leverage or margin trading, it was built to provide increased security for users by only permitting safer LTV levels for transactions that aren’t typical for leverage trading. Unlike margin trading, which allows both long and short positions, the Nexo Booster only offers leverage for long positions.
Another major change Nexo brings is the drastic improvement in the ease of use for leverage trading. Taking out credit by repeatedly borrowing against crypto assets, purchasing more assets, and then collateralizing them for more loans is a time-consuming and expensive process that can also trigger multiple taxable events.
The Nexo Booster automates all of these credit requests and transactions, saving both time and money for clients using the platform.
Nexo is currently working on adding more functionalities to the Booster and improving the security of its users. The Nexo Booster isn’t available to users in the U.S., Canada, Australia, and Estonia.