The Nexo protocol was one of the first crypto-lending platforms in the blockchain space. Users highly appreciated the opportunity to loan cryptocurrency with the help of smart contracts. Even before the DeFi space blew up, Nexo enjoyed noticeable brand recognition but after 2020, it improved even further to keep up with the competition. On Nexo, users can even take out fiat currencies in a crypto-backed loan.
To take out a loan on the Nexo platform, a user needs to provide collateral in crypto. The collateral is then kept in a Nexo-controlled account under the custody of BitGo. The loan accrues interest, and if it is not repaid, the collateral is liquidated.
The NEXO tokens are a part of the loyalty program of the platform. NEXO holders get preferential rates for loans and receive a share of the company's subsidies. Since Nexo is built on Ethereum, NEXO is a token of the ERC20 standard.