What are the differences between BlockFi and Nexo? The BlockFi and Nexo are two good platforms that offer the users crypto interest accounts and are two good competitors as well.
If you want to choose one among these two platforms it is needless to say that you will need to know which among the two will be able to meet your needs more efficiently.
For this, you will need to know the differences in the features of these two platforms, both basic and beyond. This article will enable you to know about them all.
You will be able to take out crypto-backed loans as well as earn interest on your deposits at a comparatively high rate of APY on different types of crypto coins.
While BlockFi is a good crypto lender and an interest-earning platform, Nexo offers a variety of services such as an exchange, an interest account, crypto loans, and its native token NEXO.
BlockFi is considered to be one of the first crypto platforms that started to offer crypto loans in this space and is quite trusted.
However, Nexo does not lag behind it by far with its reliable services offered by people having a sea of experience who have worked on various online lending platforms such as Credissimo since 2007.
If you are split between choosing these two platforms, you should look no further.
10 Differences Between BlockFi and Nexo
Both BlockFi and Nexo are pretty imposing companies due to their performance and by the virtue of their own rights.
These platforms offer financial services at par with traditional banking systems such as loans and interest accounts. However, that does not mean any one of them is good to go with.
If you want to know which of these two platforms will provide more benefits and the highest interest in crypto, this article will be of great help.
You will come to know about the fees, the coins and currencies supported, the security aspects, as well as the ease-of-use of each of these two platforms.
To start with, you would like to know the fees charged by these two platforms and whether or not there is any difference in it.
Well, remember, though these two platforms charge fees from their users, that is not their primary source of income and therefore there are few differences in the fee structure.
BlockFi charges fees for withdrawals and it varies according to the currency. For example:
- For Bitcoin, the platform charges a fee of 0.00075 BTC
- For Ethereum, the same is 0.02 ETH and
- For Litecoin, the fee charged is 0.0025 LTC.
In addition to that, the crypto backed loans offered by BlockFi also include an origination fee of 2% as well as a spread that may range anywhere between 0.7% and 1.5% on crypto trades.
As for Nexo, the users are charged a spread of around 2%, which is quite higher than that of BlockFi. In addition to that, the platform also charges gas fees when a user withdraws crypto coins from the platform.
This is charged to facilitate the processing of the transactions in the network and add the new blocks to the blockchain. The amount of these fees may change over time.
Free withdrawals of crypto coins are also offered by this platform but the number of such withdrawals allowed for free depends on the loyalty tier. For example:
- For Basic, the platform allows one free withdrawal in a month
- For Silver, users can make two free withdrawals per month,
- For Gold, it is three free withdrawals per month and
- For Platinum, the platform allows the users to make up to five free withdrawals in a month.
The platform also allows the users to make unlimited fiat withdrawals as well as make unlimited deposits of fiat currencies and cryptocurrencies into the Nexo Wallet. Users of Nexo can also make free credit line withdrawals on this platform.
Most importantly, for crypto-backed loans, the platform does not charge any origination or installment fees and neither does it charge any extra fees for prepayment of the crypto-backed loans.
Both these platforms are quite safe and secure to use by the users. They both have quite a strong security measure to protect the funds and accounts of their users. Some of the security measures are common to both while some are different.
As for BlockFi, the funds of the users are secured by Gemini Trust, their partner. This is known in the industry to provide some of the best crypto security solutions.
Gemini is a New York Trust company and follows the rules and regulations of The New York Department of Financial Services or NYDFS.
It holds crypto assets worth more than $30 billion quite safely and has passed both SOC 1 Type 2 and SOC 2 Type 2 exams to obtain the most coveted ISO 27001 certification.
The major portion of the crypto assets of BlockFi is stored in offline cold wallets which makes it quite impossible for hackers to hack in.
A small portion of the fund is stored in a hot wallet but it is insured to ensure the security of the funds.
With such strong security, the platform succeeded in protecting and preventing the assets of the users from being stolen when it was hacked via a SIM swap attack which resulted in the loss of data but not of funds.
Apart from the above, the BlockFi platform also has some other advanced security measures in place to ensure absolute protection of the funds of the users on the platform. These are:
- Two-Factor Authentication via an authenticator app that prevents unauthorized access to any account by the outsiders
- Address Allowlisting that allows the users to choose which particular wallet they want their crypto coins to be transferred to and
- PII Verification that ensures the actual user is using an account and not an imposter.
The platform also offers FDIC insurance on cash funds deposited on it and held with Gemini for up to $250,000 for each customer.
All the digital assets stored are covered to protect against theft and loss of funds, provided it is not due to the fault of the users.
On the other hand, Nexo uses a couple of custodians such as Ledger, BitGo, and Fire Blocks to store the funds of its users safely.
The platform itself is insured up to $375 million which is about 3% of the total worth of assets that it manages.
Some of the other notable security measures of the Nexo platform are:
- Two-Factor Authentication, which serves a similar purpose as it does for BlockFi accounts
- Biometric Login that needs the users to set up a four digit pin while signing up which they have to enter every time they log in
- Facial recognition feature that enables the users to bypass the pain of entering the four digit pin every time they want to log in
- A strict Know Your Customer and Anti Money Laundering verification process of the highest standards with their partner Jumio
- Bank-Grade Class III vaults to store the crypto assets and
- Over collateralization of loans lent out to the institutional borrowers using the funds deposited by the users to prevent any negative impact in case of any default in payments.
Also, the platform sends login and withdrawal confirmation alerts to the users to ensure that no transaction on the platform happens without the knowledge of the particular user.
3. Available Cryptocurrencies
The Nexo platform supports a range of crypto coins and stable coins such as Bitcoin, Ethereum, Litecoin, BCH, USDT, XRP, EOS, TUSD, DAI, XLM, USDC, PAX, HUSD, PAX Gold, BNB, Chainlink, and TRX.
BlockFi, on the other hand supports Bitcoin, Ethereum, PAX Gold, USDC, Litecoin, Chainlink, Binance USD, PAX, DAI, UNI, GUSD, and BAT.
Nexo is available to the residents of almost every country in the world except in Afghanistan, Bulgaria, Burma, Central African Republic, Cote d’Ivoire, Cuba, Democratic Republic of Congo, Eritrea, Estonia, Iran, Iraq, Lebanon, Libya, North Korea, Republic of the Congo, Sierra Leone, Somalia, South Sudan, Sudan, Syria, Yemen, and Zimbabwe, all arranged alphabetically.
On the other hand, residents from all over the world can access the BlockFi platform apart from those countries that are watchlisted or sanctioned.
And, it is available in every US state but the trading pairs are not available as of now in New York, New Mexico, Nevada, West Virginia, and Vermont. And, the BlockFi Interest Account is also not available to the residents of New York.
5. Interest Earning Account
Interest earning accounts for both are high yielding. However, for BlockFi users it can be as high as 8.25% based on the type of crypto assets with no minimum deposits or fees charged.
As for the Nexo accounts, though the calculation is a bit more complicated than BlockFi, users here can earn as much as 12% APY on their crypto assets, and that too daily.
Users can earn higher rates if they are members of the Nexo loyalty program. The rates can be between 4% and 8% on crypto coins such as Bitcoin, Ethereum, and Ripple.
It can be even higher from 10% to 12% on stable coins like USDC, USDT, and DAI as well as for cash deposits made in USD, EUR, and GBP.
6. Crypto Loans
As for crypto lending, BlockFi offers these loans to the residents of 45 US states in the form of USD, GUSD, and USDC with 50% of the loan value posted as collateral. The interest on these loans is in tiers and based on the LTV ratio. For example:
- For 50% LTV, the interest is 9.75%
- For 35% LTV, the rate is 7.9% and
- For 20% LTV, it is 4.5%, which is available only for those loans backed by BTC and is valued not more than 20000 USD.
And, there is an origination fee of 2% on all new loans.
As for the Nexo crypto credit line, the platform allows its users to borrow a diverse range of fiat currencies against different types of crypto coins and stable coins such as Bitcoin, Ethereum, Litecoin, BNB, XRP, Bitcoin Cash, EOS, Chainlink, Tron, PAXG Tether, Stellar, TrueUSD, DAI, NEXO Token, USDC, PAX, and HUSD.
Though the platform does not charge anything for prepayment, installment or any origination fees, users need to pay interest on the amount borrowed depending on the tenure of the loan.
This rate of interest starts from 6.9% APR for the platinum level members. The interest rates for other loyalty levels are:
- 13.9% for Base
- 12.9% for Silver and
- 8.9% for Gold.
The Loan to Value ratio available usually ranges from 25% to 90% and may also change often based on the price of the crypto asset.
7. Crypto Exchange
When it comes to determining the worth of these two platforms as a crypto exchange, there are two basic factors to consider namely, the cost and the variety.
As for the BlockFi trading platform, you can trade with eight crypto coins and stable coins. There are no fees charged for these trades but every trade does come with a spread that may range between 0.7% and 1.5%.
As for Nexo, it offers as many as fifteen different types of crypto coins and stable coins to its users to trade with apart from its native token NEXO.
Though the platform does not say anything specifically about the fees charged on these trades, the spread is as high as 2%.
BlockFi offers a Bitcoin Rewards Credit Card partnering with Visa. This card allows the users to have a cash back of 1.5% in Bitcoin for every transaction made and the amount is credited directly to the BlockFi Interest Account of the users every month to add to the interest.
The specific features of this card include:
- 3.5% cash back in Bitcoin for the first three months
- 2% cash back in Bitcoin on purchases over $50000 of annual spend
- Unlimited 1.5% cash back in Bitcoin on each purchase
- No foreign transaction fees and
- No annual fees.
As for the Nexo card, it is a MasterCard that works just as an expansion of the crypto credit line of the platform. The users can spend the value of the assets on the platform at more than 40 million merchant outlets across the world. The features of this card include:
- 2% cash back on all transactions that can be swapped between BTC and NEXO in real-time
- Instant notifications set about a transaction
- 24/7 fraud monitoring and
- 256-bit encryption protection.
You can also freeze or unfreeze it at any time via your Nexo account.
9. Customer Support
When you compare the customer support of these two platforms, that offered by Nexo can be availed by submitting a request on their website. You can also use their app for that matter.
In addition to that, there is also an online Help Center where you can ask common questions and get answers to them pretty fast.
Also, you can send an email request to them to get your issues resolved and even use their Live Chat option located at the right hand side of the bottom of the help page.
As for BlockFi, customer support is provided over the phone within the business hours of the platform from Monday to Friday.
Additionally, you can also contact them through the contact page on their website or the Help section. BlockFi also comes with a Live Chat function but it has an AI bot.
This bot tries to answer all the questions of the users before transferring them to any human for support for further assistance.
10. Some other Differences
Here are a few other differences that might seem unimportant but they are, much to the contrary.
BlockFi is based in New Jersey and was founded in 2017 by Zac Prince and Flori Marquez. On the other hand, Nexo was founded in 2017 by Antoni Trenchev and Kosta Kantchev and its head office is in Zug, Switzerland.
BlockFi manages assets worth more than 15 billion dollars while Nexo manages assets worth more than $30 million.
The total number of users of BlockFi is more than 230,000 while that of Nexo is over 2 million.
If you choose to use Nexo and want to get higher rates, you will need to buy and hold its native token NEXO. However, you need to keep in mind that this particular coin is quite volatile in nature.
The bonus offered by Nexo is $10 to its users when they sign up and deposit $100 but BlockFi offers a higher bonus.
Nexo offers an interest rate on fiat currencies of up to 12% APY and does not charge any fee for withdrawals or transfers. However, BlockFi offers interest only in crypto.
Both these platforms have some key differences in the actual loaning process. With BlockFi, it may take as long as 24 hours to get an approval on a loan application.
In comparison, it is almost instantaneous with Nexo, provided there are no complications in the Know Your Customer verification process.
As for the payouts and withdrawals, the crypto assets held on BlockFi start accruing interest right from the very day you make your deposit and it is compounded monthly. On the other hand, with Nexo, the interest is compounded daily.
The native token of Nexo is called NEXO. The supply of it is restricted to 1 billion tokens and is available in most crypto exchanges. As for BlockFi there is no such native token but it supports the native token GUSD of its primary custodian, Gemini.
Which is Better – BlockFi or Nexo?
Both these platforms are considered to be two of the best crypto accounts and which one of them will be better suited for you will depend on your specific needs.
Though both are reliable platforms and come with some of the best and industry-leading security features, if you really have to choose one among BlockFi and Nexo, here are a few specific aspects that you need to consider.
And, for that, an overview of these two platforms will be enough.
As for BlockFi, it is one of the first crypto lending platforms and it has partnerships with several popular crypto podcasts.
It functions more like a conventional bank and allows the users to hold crypto coins in their account and offers interest on the amounts held.
The users are also allowed to take out loans by posting collateral in crypto coins.
In terms of interests, the BlockFi platform pays the interests out every month and also has its own exchange platform integrated.
This enables the users to move their crypto assets much easily, instantly and directly on the platform.
The pros and cons of the BlockFi platform will also help you to know about it and make your choice more confidently.
The upsides of BlockFi include:
- Great flexibility on the tenure of crypto loans
- High rates of interest are offered to the users on their crypto coins held.
However, it will be unwise to overlook the downsides of this platform and make your choice.
The platform charges a flat fee on every withdrawal made after the single free withdrawal allowed by it. Also, the time taken to complete a withdrawal process is pretty long.
Most importantly, the number and variety of crypto assets available on this platform are pretty limited.
On the other hand, you may also go with Nexo which is considered to be a bit more prestigious than BlockFi in terms of crypto lending.
The platform has a lot of experience in online lending and the simple interface of this platform makes it quite easy to use as well.
This platform also allows its users to earn interest on their crypto coin holdings or take out a loan against crypto assets.
However, this platform is a licensed, regulated, and fully insured financial institution, which makes it a bit safer and more reliable.
The positives of the Nexo platform include:
- A pretty fast loaning process
- Secure and dependable crypto custody solutions due to its partnership with BitGo
- Allowing the users to borrow funds against crypto assets at low rates of 5.9%
- Offering higher rates of interest to users who hold their native token NEXO and
- Offering daily payouts of the interest earned on the crypto accounts.
As for the disadvantages of this platform, it includes the rates that it offers on interest accounts.
These are relatively much lower than that offered by most of the other platforms. Also, it has some limitations regarding the interest accounts to stable coins as of now.
However, the European company Nexo makes the crypto interest game more exciting since it offers some of the most competitive APY rates to the users for both crypto coins as well as fiat currencies such as USD and GBP.
If you intend to make your choice based on the beginner friendliness of each of these platforms, then you will not have much difficulty in doing so because both these platforms are quite user friendly.
However, having said that, with Nexo, the primary intention of this platform is to expedite the lending process as much as possible.
The automated process of the platform offers instant loans once the deposit in some crypto coin is made.
Therefore, if you, as a beginner, are looking for taking out a crypto loan, Nexo is your ideal platform to go with but if you want to earn interest as a newcomer on your crypto coin holdings, BlockFi will be a much better option to go with.
The software and interface of both these platforms are suitable for any crypto enthusiast who is looking to access a crypto lending platform that is quite reliable and efficient through their smartphone.
Both BlockFi and Nexo offer mobile apps to their users that are compatible with Apple and Android phones.
And, both these platforms do not offer the users a desktop application to access via a computer but they can access their accounts by using a web browser of their choice by using their computers.
And if you are worried about the security aspect, be informed that Nexo has not been hacked to date but BlockFi is known to have fallen prey to a SIM swap attack in May 2019.
This was done by a malicious actor by targeting the phone of one of its employees.
Through this process, the hacker was able to extract the names of the customers, their dates of birth, email addresses, residential addresses, as well as the history of their activity, and all these in just about ninety minutes.
However, the good news is that the hacker was not able to steal any assets from the platform.
You will need to consider a variety of factors to determine which among BlockFi and Nexo is good for you to use. This article with all the differences between them entailed will make picking out the right platform much easier for you.