Nexo just decreased their interest rates on both Crypto and Fiat, and advertised the change as a benefit to customers. Nexo coin has started tanking because of this. Is NEXO ruined?
What caused the change?
Nexo introduced fixed term savings today. Basically, this means that you have to lock up your fiat or crypto for a certain amount of time (1 month for crypto, 3 months for fiat) in order to gain better interest rates on your money. But instead of giving the customers better interest rates, Nexo pulled a classic marketing stunt, and set the fixed interest rate to be the same interest rates as before, but then lowered the interest rates on the "Flex" (normal) savings account.
For example, here is the chart for the new Crypto interest rates that Nexo is offering.
And here is the chart for the interest on Fiat:
As anyone can tell you, when they say earn more, they really mean earn the same as before we made this sudden change.
Money in fixed term savings CANNOT be used to pay for loans
A big issue with fixed term savings in Nexo is that the money that is locked up cannot be used as a safeguard against crypto loan liquidation in periods of extreme market volatility. This is bad, because Nexo users now have to make a tradeoff between taking out loans or earning higher savings rates.
Is this the end of Nexo?
Obviously this is a bad change for users, at least in the short term. However frustrating it may be, this is far from something that would cause Nexo to lose an unrecoverable amount of business. The tank in the price of the Nexo token will likely not last long, as people forget and/or start to accept the new reality. In other words, Nexo will be fine.
They market this as a benefit to customers. Rude!
You can read about it straight from the source here: https://nexo.io/blog/earn-on-crypto-and-fiat-welcomes-high-yield-fixed-terms-option
What do you think? Are you switching to Celcius or something else now? Or will you stick with Nexo?