While decentralized finance has stole the show over the past year with a slew of headlines – the closely watched Total Value Lock (TVL) figure is rising by nearly 800%, from $20 billion in early 2021 Centralized crypto financial services have also enjoyed explosive growth – swelled to $157 billion at May’s peak.
According to Nexo’s CFA and co-founder Kalin Metodiev, the crypto savings account company has grown four-fold to $15 billion in AUM, expanded to 1.7 million customers, and has assets like asset swap functionality built into the platform coming down the pipe. There are new features.
Nexo and Cointelegraph briefly crossed paths in Miami only through a short conversation at the Nexo-sponsored Bitcoin Art Gallery – one of the highlights of the conference hall. However, we caught up with Metodiev for a written interview to talk key metrics ascent soon after the madness ended, the risks to DeFi Nexo’s model, and the path forward for institutional adoption.
— Alex Schaefer (@paintwithalex) 4 June 2021
Def. adapt to
When it comes to the rise of DeFi, Metodiev sees a clear limit in terms of the heights it can reach due to some of its original, permissionless features.
“We are curious about the opportunities the DeFi space can provide and find merit in the notions of automation and decentralization,” he added. “However, this is a space that needs to align with institutional policies and standards in order to survive and thrive at large in the long run. Nexo operates in accordance with formal AML/KYC guidance and compliance protocols, which are currently in place. I am not adopted by DeFi Spaces.”
Nevertheless, the company still closely tracks emerging verticals, and is “ready to learn and adopt new best practices at any time from any source, including the DeFi space.”
At the moment it takes the form of a few initiatives, perhaps aimed at making Nexo more attractive to DeFi users. These include governance functionality for the NEXO token — down to $1.91 from its year-ago high of $4 — and a transparency campaign that, while it can’t rival on-chain information, says Metodiev. that they hope will lead to space.
“Our most recent #NexoTransparency initiative began with shedding ample light on our custody arrangements and insurance coverage. We employ a number of partners to complement the institutional framework of Nexo and we want to be transparent on the details. “
compliance and adoption
As institutional adoption continues to be marred by legal and regulatory woes, Metodiev argues that Nexo could play an important role in the inclusion of large bank funds in crypto.
“Some declare that blockchain-based financial services should separate from the traditional banking system and somehow thrive in their own little bubble. We find such opinions comical and outright fanciful in the modern financial system of the 21st century. “
He added that institutional client growth has been “exponential” and the amounts have been extraordinary at times: Nexo has been able to help institutions deposit and borrow “over $1 billion” in cryptocurrencies.
He noted that the regulatory environment remains unclear, adding that it is “difficult to comply if a full set of regulations is not in place for companies like Nexo,” but that the company strives to comply wherever possible. . Furthermore, contrary to what many DeFi builders have thought, clear regulation could help more than harm the space.
“We believe that regulations can contribute to more business in the long term, not less, and hope that more companies in the blockchain industry will follow our lead on compliance, transparency and impeccable service.”