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Crypto-focused lending platform Nexo is looking to boost its token value. In a tweet, Nexo said it would be launching a second set of its hugely popular buyback programs starting November 15.
Nexo’s Second Repurchase Efforts
According to a blog post, the new buyback program will be worth $100 million - a far cry from its first repurchase effort worth $12 million earlier in the year. The buyback initiative is expected to last up to six months and will see the blockchain-based lending platform use the repurchased NEXO tokens in key strategic investments through token mergers and for dividend payouts for customers who receive their yields in NEXO. Nexo says that its Board of Directors reached the decision, and the body of executives will likely review the success of this new effort after the six months window. This will allow them to measure the success or otherwise of the buyback program and may likely extend the repurchasing period. For now, Nexo will be repurchasing the Ethereum-based NEXO tokens on the open market and at different prices. Revenues generated from trading pairs pegged to the NEXO token, loans taken out on the ERC-20 token, and trades done on its exchange will be reinvested into the repurchase efforts. The repurchased tokens will be locked in an Investor Protection Reserve (IPR), and it will be for a vesting period of a year. After this, the locked tokens will be used to run the protocol’s daily activities surrounding interest payouts, investments, and token mergers. The Nexo blockchain has remained a popular destination for crypto-collateralized loans, with over 1 million users interfacing with the platform. This follows a growing interest in low-fee and high-yield protocols in the crypto market. Nexo has BlockFi as a rival, with both lending platforms vying for a large share of the crypto market.
Buyback 2.0 Expected to Boost NEXO
Nexo’s first repurchase efforts, worth $12 million at the time, paid substantial dividends. This saw the NEXO token surge to an all-time high (ATH) of $4.07 on May 12, reflecting a 2,430% surge year-to-date (YTD). In retrospect, NEXO has kept in tandem with the broader crypto market, given that it is tied to the price action of Bitcoin. With such remarkable success, Nexo’s Board of Directors has deemed it fit to reintroduce another buyback program to keep its token top-of-mind among investors. According to the press release, the $100 million effort is geared towards improving the liquidity of the NEXO token and boosting its long-term value. Alongside this, the crypto lending protocol also noted that its renewed efforts would help in enabling more institutional access into the crypto landscape. This is following recent investments in Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission (SEC) regulated broker-dealer Texture Capital, decentralized solutions company Qredo, and decentralized finance (DeFi) provider Yield. Meanwhile, the broader crypto market downtrend has had its toll on the ERC-20 token. The virtual currency is trading at $3.336, down 5.15% in the past 24 hours. Currently pegged at 74th on the global crypto rankings, NEXO has over $1.8 billion in market cap. [deco-beg-single-coin-widget coin="NEXO" graph="true"]