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Nexo Dividends Explained

Nov 23, 2018·3 min read
Nexo Dividends Explained

The creation of token holder value and pioneering financial innovation for the blockchain space are both encoded in Nexo’s DNA. In an environment, where less than 13% of ICOs have delivered a live product, according to a recent report by Ernst & Young, Nexo has raised funds in a token offering and we have been able to develop a user-friendly crypto lending wallet and a profitable business model in less than six months.

$300M+ in 7 Months for 170,000+ Nexo Users

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Only with Nexo, clients can expect Instant Crypto Credit Lines™ with no credit checks, as well as military-grade security, and an uncompromised user experience. Nexo is the only company in the crypto space to service 40+ fiat currencies in more than 200 jurisdictions.

As we rapidly progress with our roadmap, Nexo will continue to unveil amazing features and provide an ever-larger set of possibilities to our 200,000+ clients, partners and investors.

Recently, Nexo announced that the First Nexo Dividend will be paid on December 15, 2018.

You can always buy NEXO Tokens on Huobi, community’s most popular cryptocurrency exchanges, against BTC and ETH.

Nexo Interim Report — December 15, 2018

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How Is The Dividend Calculated

Nexo is a digital assets institution and currently generates operating revenues from interest on its Instant Crypto Credit Lines™. At the same time, in order to develop its strategy, expand its service range and manage its day-to-day agenda, Nexo incurs expenses related to sales, general operations, marketing and administration and pays corporate tax, etc.

70% from the company’s Net Profit will be reinvested back into the company to fund more Instant Crypto Credit Lines™, and a fixed 30% from the Net Profit is paid out as dividend to the eligible NEXO Token holders in the given dividend period.

Click here to see the exchanges on which you can purchase NEXO Tokens

Two Separate Dividend Payments

Nexo uses an innovative dividend-distribution methodology that rewards long-term investor confidence in Nexo and also decreases market volatility around ex-dividend dates. This approach results in the dividend profit-sharing to be split into two parts:

  • Base Dividend — paid out to all eligible token holders proportionally to their NEXO Token holdings;
  • Loyalty Dividend — paid out individually for each NEXO Token based on how long it has been in the Nexo Wallet from one ex-dividend date to the next. The share of the Loyalty Dividend will be no less than 1/3 of the total dividend amount to be distributed in any given period.

This approach aims to ensure fairness in the dividend distribution, to prevent fraud, market and price manipulation which are sometimes witnessed with dividend-yielding common stocks around the world.

This notion has been around for some time now in the traditional financial world via the introduction of Loyalty Shares (L-shares), described by Columbia University’s Patrick Bolton and Credit Agricole Group, and has been implemented by numerous Wall Street companies.

Dividend Eligibility Requirements

Nexo dividends are distributed to eligible NEXO Token holders, including for NEXO Tokens used as collateral for loans, as long as two conditions are met:

  1. NEXO Tokens must be held/staked in your Nexo Wallet at the ex-dividend date, which is 10 days prior to the dividend distribution date;
  2. NEXO Token holders must undergo a one-time verification just as they would do at any other compliant digital assets institution. Nexo’s Know-Your-Customer (KYC) process is very simple, fully automated and usually takes less than 2 minutes.

Please note that eligible token holders will also receive proportionally the dividends of all ineligible token holders.

Nexo has ongoing requirements to identify its token holders and their eligibility to receive payouts, in line with global KYC/AML/CTF compliance regulations.

Dividend Distribution

Dividends are calculated in USD and paid in your Nexo Wallet in BTC and/or ETH and/or NEXO Tokens and/or USD stable coin, whichever creates greater value for NEXO Token holders at the given moment, which will be decided by Nexo. Should NEXO Tokens be used, they will be acquired by Nexo on exchanges or collected from loan interest repayments using NEXO - as of course no new tokens can be issued, as specified in the audited smart contract. In any case, the ETH/USD and NEXO/USD conversion rates used upon dividend distribution are based on volume-weighted averages across multiple exchanges.

Frequency of Dividends

Corporations around the world customarily handle dividend distributions on an annual basis. At the end of each fiscal year and based on their profitability, they decide on distributing dividends at a certain point during the following fiscal year. In the best interest of our investors, Nexo is committed to introducing more frequent dividend payments where operating results and industry standards permit. Not only does this offer our investors

long-term capital gain opportunities from the potential upside of the NEXO Token but also provides them with an instrument with a regular and growing passive income.

How to buy NEXO Tokens

  • on leading exchanges (Nexo recommends Huobi Global)
  • by contacting the Nexo OTC desk (minimum $100,000)
  • through our automated process in partnership with Changelly, available within your Nexo account. The “Recipient Info” is automatically filled with your personal deposit address so after you complete the process, you will receive your tokens automatically in your Nexo account. (Warning about Purchases via Changelly using Credit Card: Due to the higher fees charged by Changelly for purchases using a credit card, we do not recommend this payment method. If you decide to use this option, please double-check the amount of NEXO tokens you will receive.)

Disclaimer: Nexo does not provide any tax, legal, accounting or reporting advice. You should always consult your own tax, legal and accounting advisors on related matters.

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