About the company
Nuo is a non-custodial decentralized financial marketplace where users can lend money, borrow money, trade margin, and swap cryptocurrency. It is built on top of the Ethereum network and makes use of the company’s protocol for smart contracts. The broker supports nine different tokens and provides its users with a simple way to earn passive income from their ERC20 tokens, as well as the opportunity to trade with leverage.
The company allows you to trade cryptocurrencies on margin with up to a 1: 3 leverage. To do so, you must first choose a trading pair, or which currency you want to initiate long or short positions in, as well as which currency you want to convert it into. To open a position, a trader must provide collateral, the same as when borrowing tokens. The platform makes it simple to examine a cryptocurrency’s liquidation price (which is more or lower than the entrance price, depending on whether you go short or long); however, the price can fluctuate as the value of the cryptocurrency in question rises or falls. It will indicate the entire interest you must pay before confirming a margin trading position, as well as a confirmation of the interest you must pay after opening (no matter how long you keep your position open). If you don’t close it sooner, your position will be available for 30 days by default. You should also be aware that the stop loss is set at 80%, at which point the trade is automatically liquidated. After liquidation, any leftover collateral will be sent to your account or wallet.
The broker provides a platform functionality that allows users to swap out one type of ERC20 cryptographic token for another. It operates by dividing your swap order among several high-liquidity Decentralized Exchanges (DEXs) to obtain the best price for your swap. 13 different ERC20 tokens are supported by The company’s trading feature.
This feature allows you to establish a maximum slippage percentage for a swap order, giving you more control. If the swap slippage exceeds the defined limit, your order will not be executed, preventing severe unexpected losses. The broker reduces slippage by spreading your exchange order among multiple DEXs (e.g., Kyber Swap, Uniswap, Oasis) to ensure you get the best price for your tokens.
On Nuo’s network, there are no costs for gas, borrowing, or lending cryptocurrency. This is in contrast to the majority of other Defi platforms, which charge a commission for such deals. However, there are transaction expenses of 0.6 percent and 0.3 percent for each margin trade and swap made on the platform, which is used to cover the gas fees of any meta-transactions. You should keep in mind that these transaction costs may change if the Ethereum network’s gas fees change.
There is no “counterparty” risk connected with the smart contracts employed because Nuo is non-custodial and all transactions take place on the chain, unlike traditional centralized crypto lending. Lending tokens is less risky when loans are over-collateralized. The difference might be fully or partially reimbursed with the help of the insurance fund if the liquidated collateral is insufficient to pay the cost of borrowed funds or owing to severe price volatility. Lenders can use this fund to hedge their bets by putting a portion of their profits into it.
The primary dangers include a hacked Nuo smart contract technology and bitcoin price crashes or spikes. Both of these dangers have been identified by the platform, and actions have been taken to mitigate them. Quantstamp, a security auditing organization, previously examined the platform’s smart contract technology.
It’s worth noting that Nuo considers the technology it uses on its platform to be experimental, so you should educate yourself on how it works before utilizing it.
By creating a “debt reserve,” the broker’s app makes it simple to deposit your cryptocurrencies for issuance to borrowers. When you set up a debt reserve, it is pooled with others, allowing you to earn interest on your daily loan payments. It’s worth mentioning that your debt reserves will only start generating interest after one day, and the profit will be added to your account every day at midnight after that. The process of canceling your debt reserve is simple, requiring only a few short clicks on the site. The whole reserve sum, as well as any interest collected, is then remitted back to your account or wallet. Please keep in mind that the required quantity of tokens must be accessible to acquire them from the reserve pool. If this is not the case, you will continue to earn interest on your loan until the required number of tokens is available, at which point the interest and tokens will be transferred to you. The annual interest rate on the platform’s loan may not accurately reflect the amount of interest you earn with your deposited tokens. You will not be credited or given interest if none of the users borrow any of the categories of tokens that you have placed. The amount of interest you pay is also determined by your debt reserve fund share.
To borrow a quantity of ETH or any ERC20 token, you must offer 1.5 times the loan’s value in collateral. After you’ve set up your account, monies are moved directly to you, from which you can send tokens to your wallets at any time.
Any loan you accept is over-collateralized, and to avoid liquidation, you must keep the collateral above a specific margin. There are three types of loan status: safe region, critical region, and hard stop.
Your collateral will not be automatically repaid if your loan status is in a safe zone. Nuo personnel tracking active debts can manually trigger liquidation if it is in a critical region. The borrower, on the other hand, will not lose more collateral than you anticipated. If you have a loan in the hard stop zone, it will be automatically liquidated, and you may lose more collateral than you originally borrowed. There is a 10% buffer between the criterion region and the hard stop for all loans.
Interest rate calculation
On Nuo, each loan has a set percentage that you must repay. The interest rate is determined by the number of assets in the loan pool at the time the loan is taken out. Even if the loan is repaid before the 30-day maturity date or if the loan is automatically repaid, you must pay 30 days interest. It’s worth mentioning that the maximum interest rate is 50%, and that your rate will not alter once the smart contract is launched.