Nexo hit the markets with a record breaking announcement. The platform plans to dedicate $100 million USD worth of capital to buying its token. The token trades on the open market, and this move should help to both boost the value of the token, and reward Nexo users with better liquidity.
Like any buyback, the purchases will be done by the company, and each buyback tranche will be held for at least 12 months before being used for token mergers with applicable vesting schemes that are a massive help to Nexo token holders.
This move by Nexo comes after a similar program was a smashing success earlier in the year. The program was worth $12 million USD, however the current buyback program is much larger. This may have an outsized effect on the value of the Nexo token, especially if it becomes a common strategy for the platform.
Nexonomics 3.0 is Taking Off
It should be pretty obvious that Nexonomics 3.0 is here to stay. The buyback of tokens is a key part of this new tokenomics, and it has already given way to amazing results for the Nexo token.
The token hit an record high of $4 this year, and with the huge interest rates that Nexo offers lenders on the platform, this figure may seem low in the coming years. With a guaranteed buyer, the markets will likely take a kind view of the Nexo token.
Antoni Trenchev, Co-Founder and Managing Partner at Nexo, told media,
“The buy-back program announced today reflects our strong financial position and underscores our ability to simultaneously upgrade our products, maintain a strong balance sheet, and invest in alternative growth strategies, all while providing significant utility and growth to NEXO Token holders. As Nexo’s market share increases and the industry matures, we’ll continue to seek acquisitions and token mergers to cement our leadership position in the crypto lending ecosystem.”
The simple fact that Nexo is addressing its tokenomics with Nexonomics 3.0 should help attract fresh capital. Even if the platform didn’t offer high interest rates, the token would be attractive with these kinds of offers on the table.
In some ways, markets are simple. One of the most simple things that everyone understands is supply and demand. Apparently Nexo has been successful enough to pad its coffers with cash to buyback its tokens, which will be used to make the entire ecosystem even better.
More Liquidity in the Nexo Ecosystem
Markets live and die by their liquidity – and with Nexonomics 3.0 – it is fair to say that the Nexo ecosystem will be far healthier. When there is more liquidity in an asset, major moves are cushioned, and the overall performance of the asset rises.
Nexo is a lot more than a token, and this will also help the platform over the medium term. With massive demand for yield, the returns that Nexo delivers will continue to attract clients. In fact, as more institutional investors look for yields, Nexo may see a rush into its platform.
It is simple, there isn’t much in the way of yield on offer in legacy assets, and central banks are creating massive amounts of inflation. In short, this is a perfect storm for a platform like Nexo (in the best possible way).
Nexonomics 3.0 is bigger than buybacks, but the capital that Nexo has dedicated to ensuring that its token has both a fair value, and ample liquidity, is impressive. As returns from other fixed income assets continue to flag in real terms, look for crypto to become even more popular.
If you want to learn more about Nexo, or how the platform offers its clients double digit annual returns – just click right here.
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