Crypto lending platform Nexo has increased the size of its buyback program, giving the company more discretion to buy back its native token to drive interest payments or make strategic investments in the future.
On August 30, Nexo revealed that its board of directors had committed an additional $50 million for buybacks, building on the company’s initial $100 million program launched in November 2021. The approval allows for the discretionary buyback of up to $50 million worth of NEXO tokens on the open market.
NEXO is the platform’s native cryptocurrency that offers users the ability to earn interest and get lower interest rates on loans. The token currently has a market capitalization of $563.6 million and a 24-hour trading volume of $46.7 million, according to data from the Nexo website.
The company said it increased the size of its buyback program to demonstrate its “strong liquidity position” and its willingness to invest in its community. The initiative will take place over six months, and all tokens repurchased will be subject to a 12-month vesting period. Once the acquisition period is over, the repurchased tokens can be used to pay daily interest with NEXO tokens or make strategic investments “through token mergers,” the company said.
Nexo has wanted to demonstrate its financial strength amid the bear market, even going so far as to ask Citigroup for advice on the best way to acquire struggling cryptocurrency companies. Although the entire crypto-asset sector has been shaken by the implosion of the Terra ecosystem, the centralized finance companies such as Celsius, Voyager Digital and BlockFi are the ones that have suffered the biggest setback.
The cryptocurrency market remains in a precarious state, with Bitcoin (BTC) showing a strong correlation with traditional equities. Some analysts fear that this strong correlation could trigger another selloff in digital assets, as traditional markets continue to react to the Fed’s actions.
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