NEXO token buybacks aim to improve the sustainability and stability of the platform.
A few months ago, Nexo made headlines by offering to buy part of the debt and assets of Celsius Network, a rival cryptocurrency lending platform, when it was forced to Stop withdrawals from its clients due to lack of liquidity.
Now, the loan protocol has announced in a Press release from their blog, $50 million investment in a NEXO token buybackThe buyback will not take place all at once, but will take place over time over the next six months.
This is the Third repurchase of NEXO tokens by the company, having accumulated just over $100 million in tokens between November 2021 and May 2022.
NEXO tokens repurchased in this way will go to the Investor Protection Reserve, where they will be blocked and have a dressing 12 months. Once released, these tokens can be used to pay interest to the platform's users or to make strategic investments that facilitate the Nexus growth.
The news of the token buyback has sat well with NEXO, which has up 6% in the last 24 hours, standing at $1,06 at the time of writing.
Nexus and the instability of lending platforms
Until now, Nexo has not been dragged down by the bear market and has been able to avoid the fate of its competitors. Its main competitor, Celsius Network, had to file for bankruptcy after having suspended withdrawals to its customers in June.
Other major platforms, such as Travel Digital, also succumbed to the cataclysm caused by the sinking of Terra and UST, which caused the fall of giants like Three Arrows Capital.
“In very tough market conditions, our token has managed to remain consistent and follow BTC and ETH in their movements,” explained Antoni Trenchev, co-founder and managing partner of the platform, adding: “Now, our clients and investors need a stable project and our third token buyback guarantees stability to “escape” the market rollercoaster.”
In June, The platform began working with Citigroup, who also advised Celsius Network to restructure its debt, with the aim of consolidating the business and studying the purchase of other cryptocurrency lending platforms.
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