Warning! This is just my sharing of my financial journey, not a financial advice; however, feel free to take my journey as a use case reference to chart your own financial planning journey. And if you have a better idea, feel free to share your knowledge and we can compare notes and make our money earn for us together!
Finally after many moons of micro blogging in noise.cash and occasionally write here in read.cash + able to redeem some intial investment tokens from testing beta release games, I am ready to test the Nexo's minimal credit line!
Patiently waiting for the compounding in Nexo tokens to earn a good credit score for me to borrow some tangible money to earn more with all the crypto (including my hard earned BCH) as collateral is definitely no easy task.
Instead of using off my earned BCH to buy other tokens / property that yields interest, I will loose my BCH itself. With the almost 7 months compounding in $NEXO tokens, it is now ready to be used as interest payback for credit line borrowing; and whenever I choose to payback my loan in interest using $NEXO tokens, my BCH is untouched, while I have my extra credit to own a long-term income generating token (property).
Something I learn from Rich Dad Poor Dad...
That being said it doesn't mean I must borrow MAXIMUM of my credit line. One must NEVER borrow 100% of available credit line so that if your BCH value drops, your collateral liquidation risk is minimal.
That is why I have decided to test the almost minimal credit line ($50) for the first try, just to make sure I can pay back interests that is less than $1 in a month's time.
Through the Nexo app on my phone, it is relatively straight forward. In your dashboard you can already see your credit line and a BIG BLUE BUTTON for you to press to borrow money from Nexo.
It will then ask you to choose between USDC and USDT. Then you head over to next and agree the Nexo Crypto Credit terms before you click to withdraw.
Just so happened that RealT actually has a tokenised property on sale, and being an almost 1 year occasionally Dollar Cost Average token investor in the platform (see my first review about it when I first started investing using my real money), this is the perfect time for me to try out if purchasing directly the token from Nexo (using the credited USDC) is possible.
Checking out directly from the site with the choice of payment in USDC was relatively simple, because it requires the USDC in ERC-20 token form (and not other L2 chains), Nexo's zero fee withdrawal becomes easy.
Once you have keyed in the right amount, simply press the "Withdrawal" button.
Go through both 2 step authentication and email verification...
And your withdrawal is on its way.
Surprisingly, thanks to the recent greatly reduced gas fee on the Ethereum network, the entire process is done within 15 minutes.
And I became a happy customer here, writing a review on how easy it is to create a minimal credit line (once your savings reaches above $500 USD worth) with, now successfully owning 1/10,000 of a piece of a property in USA in token form on the blockchain!
Of course, after I signed the legally generated purchase agreement through the service HelloSign with RealT.
Do you think using your hard earned BCH (when reaches $500 USD worth) as collateral to invest on stable yield tokens backed by real property worth dipping your foot into?
Feel free to share your thoughts here or in noise.cash where I will be posting this article's link there for discussion!
(I'll be more active in Noise.cash though)
Hey @Momentswithmatti , well, the % is actually based on Nexo's membership level. So the higher the level you are in, the lower the interest to pay back. Mine is at 6.9% per annum which still is cheaper than 18% credit card interest. But you need to have minimum $500 USD worth of crypto savings in Nexo first and if you switch it to earning $NEXO tokens (after validation), you will have lower interest rate compared to compounding your earnings in native tokens (like BCH).
If I am unable to pay back, and the crypto value drops, then the collateral is in my BCH, but the good thing is that BCH isn't down to rock bottom just yet, and I have 1 month to pay it back all before they liquidate it (if the price drops).
As I have mentioned in noise.cash post, there are some things you need to prepare before you start borrowing credit in USDC
Warnings:
I hope these are some pointers that will prep you to use your first credit to roll more money.
That is fascinating and I need to reread and just exactly understand how you got credit and where you started, but the principle of it seems really cool.
Even the principle % is actually really cool. All you need to start is to sign up (it's free) and then you start compounding your interests in $NEXO tokens.
The good thing is that now even the $NEXO token itself can self compound; which means you can save even much more when you pay back your credit in $NEXO
how awesome! i never thought something like this is available in the crypto world.. how much is the interest for borrowing the minimal amount?was it less than a dollar? and do you pay it from the collateral itself or you have to add funds again? sorry for the noob questions