While decentralized finance has stolen the show with big headlines over the past year, the closely watched Total Value Locked (TVL) figure grew remarkably nearly 800%, from $ 20 billion in early 2021 to $ 157. Billion at May Peaks – Centralized crypto financial services have also enjoyed 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 built-in asset exchange functionality. on the platform.
Nexo and Cointelegraph only crossed paths briefly in Miami through a brief conversation at the Nexo-sponsored Bitcoin Art Gallery, one of the conference room’s highlights. However, we caught up with Metodiev for a written interview shortly after the craze ended to discuss the escalation of key metrics, the risks DeFi poses to the Nexo model, and a way forward for institutional adoption.
– alex schaefer (@paintwithalex) June 4, 2021
Adapt to Defi
When it comes to the rise of DeFi, Metodiev sees a clear ceiling in terms of the heights it can reach due to some of its core features without permission.
“We are intrigued by the opportunities the DeFi space can offer and we find merit in the notions of automation and decentralization,” he said. “However, this is a space that must align with institutional policies and standards to survive and prosper on a large scale in the long term. Nexo operates in accordance with formal AML / KYC guidelines and compliance protocols, which are not currently adopted by the DeFi space. “
Nonetheless, the company still closely follows the emerging vertical and is “open to learning and adopting new best practices from any source at any time, including the DeFi space.”
At the moment, this takes the form of a handful of initiatives, perhaps aimed at making Nexo more attractive to DeFi users. They include governance functionality for the NEXO token, which dropped to $ 1.91 from highs of $ 4 earlier in the year, and a transparency campaign that, while it might not rival on-chain reporting, Metodiev says he expects that lead the space.
“Our most recent #NexoTransparencia initiative began with the clarification of our custody and insurance coverage agreements. We employ multiple partners to complete Nexo’s institutional framework and we want to be transparent in the details. “
Compliance and adoption
As institutional adoption appears to be perpetually paralyzed by legal and regulatory issues, Metodiev argues that Nexo can play a key role in engaging money from big banks in cryptocurrencies.
“Some people proclaim that Blockchain-based financial services should separate from the traditional banking system and somehow thrive in its own little bubble. We consider those views to be comical and downright ghostly in the modern financial system of the 21st century. “
He noted that the growth of institutional clients has been “exponential” and that the sums have been extraordinary at times: Nexo is able to help institutions accumulate and borrow more than “one billion dollars” in crypto assets.
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He notes that the regulatory environment remains murky, saying that it is “difficult to comply without a complete set of rules for companies, such as Nexo”, but that the company strives to comply whenever possible. Also, contrary to what many DeFi builders think, a clear regulation could help the space more than harm it.
“We believe that regulations can contribute to more business in the long term, not less, and we hope that more companies in the Blockchain industry will follow our example in compliance, transparency and impeccable service.”