Crypto Lender Nexo to Enter Prime Broker Race, Enlists Chainlink for Audits

Crypto lender Nexo is preparing to enter the prime brokerage space with help from Chainlink-powered audits to bring more transparency to its operations.

The Swiss lender announced an integration with the oracle provider on Wednesday. Chainlink will provide audit trails for Nexo’s lending and borrowing operations, revealing how the firm handles user collateral, Nexo CEO Atoni Trenchev said in an interview.

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In cases where interest paid on a loan is in a separate currency than what the loan is denominated in, Chainlink will provide an exchange rate for calculating interest payments. The Chainlink oracle protocol operates as a decentralized and transparent arbiter of asset prices, eliminating the possibility of a central point of failure. 

Nexo hopes this increased security will aid the company’s expansion into the prime brokerage business. The lender revealed in the same announcement it plans to build out a “complete prime brokerage product suite.” Earlier this year, Coinbase, Genesis Trading, Bequant and BitGo all announced plans to become prime brokers.

The news of Nexo’s brokerage plans comes following the company’s announcement in June that, like its competitors in the lending market, it was offering interest on crypto deposits.

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Nexo now offers 5% on bitcoin (BTC), bitcoin cash (BCH), ether (ETH), XRP, EOS, stellar (XLM) and litecoin (LTC), half of the 10% that Nexo users earn on fiat currencies and stablecoins like USDT, dai and PAX. The interest for the product gets deposited into customer accounts daily at 12:00 UTC (8 a.m. ET).  

Trenchev said before launching interest on crypto, he waited until Nexo had found “proprietary, market-neutral” strategies for profiting from loan arbitrage, basis trading and other strategies.