While decentralized funding stole the show with numerous headlines over the past year – the closely watched Total Value Locked (TVL) number rose sharply by nearly 800%, rising from $ 20 billion in early 2021 to $ 157 billion Dollars to peak in May – centralized crypto financial services have also seen explosive growth.
According to Kalin Metodiev, CFA and co-founder of Nexo, the crypto savings account company has quadrupled to $ 15 billion in AUM, expanded to 1.7 million customers, and has new features like asset swap functionality coming into the coming Platform are integrated.
Nexo and Cointelegraph only met briefly in Miami over a brief chat in the Nexo-sponsored Bitcoin Art Gallery – one of the highlights of the conference room. However, we met Metodiev for a written interview shortly after the madness ended to talk about the rise in key metrics, DeFi’s risks to the Nexo model, and the path to institutional adoption.
The Bitcoin Art Show is lit! Made it to Miami and met the people from Scarce City. Art is hung and auctions in action https://t.co/yQr0kQRWUx pic.twitter.com/RMV3moTNGx
– alex schaefer (@paintwithalex) June 4, 2021
Adaptation to defi
When it comes to DeFi’s rise, Metodiev sees a clear upper limit on the heights it can reach due to some of its key, permissionless features.
“We are fascinated by the possibilities that the DeFi room can offer and find advantages in the terms automation and decentralization,” he said. “However, this is a space that must be aligned with institutional guidelines and standards in order to survive and thrive on a large scale over the long term. Nexo works in accordance with the formal AML / KYC guidelines and compliance protocols, which are not currently being adopted by the DeFi space. “
Nonetheless, the company is still closely following the emerging industry and is “open to learning and applying new best practices from any source at any time, including the DeFi area”.
Right now, that’s taking the form of a handful of initiatives that may aim to make Nexo more attractive to DeFi users. That includes governance features for the NEXO token – which has dropped from $ 4 highs earlier this year to $ 1.91 – and a transparency campaign that, although it may not be able to keep up with on-chain information , hopefully will lead the room.
“Our most recent #NexoTransparency initiative began by educating people about our custody arrangements and our insurance coverage. We employ several partners to complete the institutional framework of Nexo and wanted to be transparent in the details. “
Compliance and Acceptance
Since institutional acceptance seems to be constantly hampered by legal and regulatory issues, Metodiev argues that Nexo can play a key role in getting the big banks’ money into crypto.
“Some people proclaim that blockchain-based financial services should break away from the traditional banking system and somehow thrive in their own little bubble. We find such opinions in the modern financial system of the 21st century funny and downright phantasmagoric. “
He found that institutional client growth has been “exponential” and that the amounts have been extraordinary at times: Nexo is able to help institutions amass and borrow crypto assets of more than “$ 1 billion”.
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He notes that the regulatory environment remains opaque and says it is “difficult to be compliant without a full set of rules for companies like Nexo” but the company tries to be compliant wherever possible . Additionally, contrary to what many DeFi builders think, clear regulation could do more to help than harm the space.
“We believe that regulation can do more business, not less, over the long term, and we hope that more companies in the blockchain industry will follow our lead in terms of compliance, transparency and impeccable service.”