Nexo and Celsius are two of the most popular crypto saving, borrowing, and lending platforms in the US and globally. Both platforms offer similar products and features. In this Nexo vs. Celsius comparison, we will evaluate the advantages and disadvantages of each platform for crypto lending and borrowing.
Overview: Nexo vs Celsius
When we take an overview look at Celsius and Nexo, here is what we find:
Company headquarters Zug, Switzerland Florida, USA
Company Established 2018 2017
APY Up to 17% Up to 17%
Cryptocurrencies 20+ coins including BTC, ETH, LTC, DAI, and USDC; 40+ fiat currencies including EUR, USD 40+ coins including BTC, ETH, LTC, GUSD and USDC
Assets available to Earn 32 52
Beginner-Friendly YES YES
Mobile App YES YES
Supported Countries Global-Excluding Bulgaria, The Central African Republic, Cuba, Estonia, Iran, New York, Vermont, North Korea, Syria Global- Excluding Iran, North Korea, Sudan, South Sudan, Syria, Cuba. Interest accounts are no longer available to new non-accredited investors in the USA or UK
Celsius is a decentralized finance (DeFi) platform that offers users crypto lending, borrowing, and earning opportunities. In addition, the app enables the purchase of 10 specific cryptocurrencies at the time of writing that can be converted into more than 30 other e-currencies.
This is not for day traders; it’s ideal for beginners and anyone interested in passive income. U.S. residents are permitted to register on the platform; however, as of July 2021, new users in New York and Washington states cannot purchase assets through the app.
To comply with the Know Your Customer (KYC) requirements of Celsius Network, U.S. residents must submit a Social Security Number and photo identification to the exchange. After you have validated as a customer, you will need to fund your account with an automated clearing house (ACH) transfer from your bank using regular money. After that, you can purchase any number of 10 supported cryptocurrencies for direct deposit from two of Celsius’ partner exchanges.
How Celsius Works
The platform allows users to borrow or deposit crypto assets and earn interest or dividends. Borrowers can choose to receive a loan in cash or cryptocurrency. In addition, borrowers can use more than 40 types of cryptocurrency as collateral for loans.
Celsius Network allows you to earn up to 17% annual percentage yield (APY) when you hold your crypto on the platform. In addition, it pays interest every week, and you can earn 25% more rewards if you choose to earn in CEL. Furthermore, the interest rates are as low as a 1% annual percentage rate (APR) for borrowing.
Nexo is a blockchain-based platform that offers crypto lending and makes it easy to access instant crypto-backed loans. Their slogan is “Banking on Crypto.” They aim to replace traditional bank services with crypto.
The Nexo platform allows users to lend their crypto, which provides the basis for obtaining loans without relying on credit scores. Users earn interest on their crypto holdings while they have made a loan.
Since its launch, Nexo has facilitated more than $1.5 billion in loans from more than 2 million users across 200 jurisdictions and supports over 40 fiat currencies. The lending service has become increasingly popular as an alternative investment method for individuals and companies seeking easy liquidity access. It is a growing part of the emerging decentralized finance industry that is expected to experience rapid growth in the coming years.
How Nexo Works
Nexo’s business model uses an “under-leveraging” strategy to protect both the company and its customers. The Nexo platform allows clients to borrow a set percentage of the value of their crypto, defending clients from the daily fluctuations of crypto prices. In addition, this ensures that the client is less likely to lose their crypto, ensuring Nexo is protected should a customer default on their loan.
Getting a loan on the Nexo platform is simple and fast, and users can complete the process within a couple of minutes at no cost. There are no hidden fees of any kind. The use of blockchain technology further makes the whole program transparent as all smart contracts and procedural algorithms are used in the Nexo Oracle module.
NEX Token vs. CEL Token
Both NEXO and Celsius have their own native tokens, the NEX token, and the CEL token. Here’s a comparison of the two coins’ benefits.
Nexo, a digital asset lending platform, has launched a new product that allows clients to opt to receive pay-outs in the platform’s native NEX token, regardless of the amount of assets held in a Nexo wallet. The incentive brings a competitive yield with an extra 2% interest on all digital assets. Earning the NEX token increases the interest rate to 8% APY for cryptocurrencies and 12% APY for fiat currencies and stable coins.
NEX token holders also receive dividends. Over the past three years, NEXO has paid over $29 million in dividends to its token holders.
In May 2018, the platform was launched through an initial coin offering (ICO) of its proprietary token, CEL. During this ICO, they raised $50 million, making headlines in the process.
CEL has performed well in the years since its launch. It has maintained its upward trajectory, increasing its value by 3767.79% each year. The CEL token can be held to receive a bonus on interest payments on deposits. Earning CEL also permits access to discounts on loan interest payments.
Trouble for Celsius in the UK
Due to uncertainty of the Financial Conduct Authority (FCA) regulations within the UK, Celsius halted signups for new user operations. Take heed to the fact that Nexo, although utilized by many UK customers, is not FCA approved.
The fee structure of Nexo is flexible and transparent, with no prepayment or origination fees. However, a withdrawal fee may be applicable based on your tier when you withdraw funds from your crypto-backed loan.
Celsius does not charge any fees for transfers, withdrawals, transactions, origination, or early termination.
Celsius and Nexo are both custodial platforms, meaning they hold their users’ private keys. However, Crypto loans and deposits cannot be FDIC insured, so one should research the risks of using crypto interest products before investing.
Both companies, however, have demonstrated a high degree of security when it comes to protecting customers’ deposits from potential hackers.
Nexo has partnered with several companies for client funds protection, including BitGo and Ledger Vault. Additionally, the company holds $375 million in insurance through third parties. BitGo provides Nexo with cold storage solutions and bank-grade class III vaults through their SOC 2 Type 2-certified custodianship program.
Celsius secures customer funds by employing top-tier security and cyber defense techniques. The company has ISO certification, runs a 24/7 Security Operations Center, and uses a team of cybersecurity experts who monitor the system around the clock.
In addition, Celsius deploys unique MPC (Multi-Party Computation) technology to increase its security measures. In partnership with Chainalysis, Celsius provides additional monitoring and security infrastructure, and funds are insured through Fireblocks.
Ease of Use
Nexo and Celsius offer similar services, but Nexo offers more flexibility for crypto loans and has a built-in crypto exchange. In contrast, Celsius provides a slightly more extensive crypto selection for loans. In addition, both companies have user interfaces that are easy to navigate on web and mobile apps.
The Nexo platform supports 40 digital assets on its lending, borrowing against, and trading platform. This includes major cryptocurrencies such as BTC, popular altcoins including ETH, LTC, MATIC, and LUNA, and stablecoins such as USDT and DAI.
The Celsius platform also supports a broader range of cryptocurrencies that can be deposited into an interest-earning account which is ten more than Nexo’s list of 40 assets. However, compared to Nexo, the selection of crypto that can be purchased on Celsius is limited to 13.
Advantages of Nexo over Celsius
The primary advantage Nexo has over Celsius is that they offer immediate, short-term loans via a credit/ debit card. This is the only advantage. This translates to Nexo as the option for those who dispute selling their crypto but need quick cash.
However, those immediate, short-term loans do not offer people the same reasonable interest rates. Additionally, Nexo has no sign-on bonus or interest on the crypto deposited. Nexo is the only Crypto provider that provides a “line of credit” via debit/credit card instead of a fixed loan. Therefore, if this is what you are seeking, then Nexo would be your best option. Yet, there are better options if you want to create leverage to give your crypto more value for investing (for example, real estate or more crypto). This brings us to the next section–the advantages Celsius has over Nexo.
Advantages of Celsius over Nexo
Celsius’s advantage over Nexo is that it offers the user better rates. These better rates are acquired when you use your crypto to get a loan backed by its current value. Another advantage is Celsius offers services to their users that are much better overall, including customer service. Celsius, unlike Nexo, offers its users a quicker service and is more like an actual human. In addition, they offer new users excellent promotions for signing up.
Both of these platform companies are trustworthy. Nexo is for the person in need of short-term “lines of credit” loans. Celsius is better if you desire a loan for the long term.