Nexo Brainer #10: The Nexo Booster Explained

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Nexo Brainer #10: The Nexo Booster Explained

Yet another Nexo Brainer episode is here! This time George Manolov covers in detail our brand new product – the Nexo Booster. Get the lowdown on what the Booster is, how it works and why should check it out if you want to maximize your crypto profits.

Overview & Benefits

The Nexo Booster1 is a sophisticated, yet intuitive leverage product allowing you to amplify the purchasing power of your crypto holdings. You basically grow your position in a given asset without adding more funds than the ones you already hold on the Nexo platform.

Put simply, the Nexo Booster is an automated way for you to get crypto credit that is instantly used to buy more assets all through one easy transaction flow.

  • Leverage: You get between 1.25 and 3x leverage on your portfolio. You can receive the boosted equivalent in another cryptocurrency.
  • Higher LTV: Usually when you take out a crypto credit, the different assets you use as collateral have various LTVs, ranging from 15% for NEXO Tokens to 90% for stablecoins. But when using the Nexo Booster, the permitted LTV is always 70% for all accepted currencies thus allowing you the get the most of your assets.
  • Crypto Rewards: Every time you do a boost transaction you get up to 0.5% back.

When to Use the Nexo Booster

There’s one major use case where it’d make the most sense to utilize the Nexo Booster. If you’re expecting a positive price movement for a particular asset, you can multiply your profits via the Nexo Booster – growing your crypto holdings, without extra capital.

Once your price target is hit, you can repay your crypto credit and lock in the gains.

How to Get Started

Boosting your portfolio is a simple and user-friendly process. You don’t need to be a seasoned investor to be able to use the service.

  1. Go to the Exchange tab inside the Nexo app and select “Booster”.
  2. Choose your “Pay with” currency – this is the asset you want to leverage against.
  3. Drag the Leverage bar to how much (1.25-3x) you want to boost your assets.
  4. Add your desired “Receive” currency – the asset you want to acquire.
  5. Beneath you'll also see the Profit Projection bar. You can drag it back and forth to project the outcome of your boost transaction depending on how the price of your chosen asset changes in the future. This is a nifty tool to help you predict potential profits.
  6. Tap “Exchange” and you’re done. The newly-acquired assets will be added to your Credit Line Wallet as collateral for your boost transaction.

If you already have an open credit line, the Booster function merges all outstanding loans together into one Credit Line.

You can use your profit to make partial repayments of you credit by using our standard repayment flow.

You can also swap your newly-acquired crypto by going to our Exchange. Simply select "Credit Line Wallet" and you're all set to start swapping. Have in mind that exchanging assets in your Credit Line Wallet happens through our Collateral Exchange feature where you can only swap collateral for assets with an equivalent or higher LTV.

Once you repay the outstanding crypto credit, you get to retain the difference between the sell price of the assets you borrowed and your original investment.

Example Scenario

Let’s say you keep $50,000 worth of BTC inside your Nexo account and you have no outstanding credit. Here’s your starting account balance:

  • Outstanding credit: $0
  • Collateral value: $50,000
  • Loan-to-value ratio: 0%

You feel good about the future price of ETH and this optimism manifests in your desireto acquire $100,000 worth of the asset.

You initiate a 2x boost transaction facilitated through your $50,000 BTC portfolio. You get $100,000 worth of ETH, and the difference is covered by a crypto credit, collateralized by your new ETH holdings and your pre-existing BTC that was converted to ETH during the transaction.

After the booster transaction is executed, you will see $51,000 in outstanding crypto credit:

  • Outstanding credit: $51,000, comprised of $50,000 credit and $1,000 Booster fee (2%)
  • Collateral value: $100,000
  • Loan-to-value ratio: 51%

You can then repay the credit once your Ether reaches your desired price target – benefiting from the price growth. Profit-taking happens simply by using Nexo's regular credit line repayment flow to pay back credit and free up the collateralized assets from your boost.

When planning on how and when to repay your boost, remember that the Nexo Booster uses our Instant Crypto Credit Lines to facilitate the credit. This means that your boosted sum will accrue interest starting from 6.9% APR – or 0% if you keep your LTV below 20%.

Needless to say, the market never moves in a single direction. As a leverage product, the Nexo Booster can work in both ways – it amplifies your gains when your assets appreciate, yet magnifies the losses when prices are falling. In order to make an educated decision, you need a good understanding of how the LTV ratio and price-based margin calls work. More details can be found in the Nexo Help Center.

If you’re new to the Nexo Brainer, or if you missed any of the previous episodes, you can catch up here. Also, remember to subscribe to our YouTube channel to be the first to know when a new installment of the Nexo Brainer comes out.

Nexo Brainer, hosted by our Business Developer George Manolov, is designed to keep you up to date on the latest Nexo features. In each episode, our expert team shares strategies on how to use our products to your best advantage, so make sure you check out the videos.

1Currently excluded from Nexo’s Nexo Booster product per the Nexo Wallet Services General Terms and Conditions, the Nexo Crypto Credit General Terms and Conditions and the Nexo Exchange Service General Terms and Conditions, as amended on occasion, are citizens or residents of Bulgaria, Estonia, the United States of America, Canada and Australia, as well as of other jurisdictions subject to certain limitations or restrictions as may be applicable at times.

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