P R O P I C K # 1

B R O W N S T O N E R E S E A R C H S P E C I A L R E P O R T

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P R O P I C K # 1

Welcome to Unchained Profits Pro.

This additional level of access brings investors even deeper into the blockchain industry than any other product I offer.

My mission with Unchained Profits is to recommend blockchain investments that are easily accessible to every investor, regardless of experience. Many of our Unchained Profits recommendations can be easily purchased and stored on major exchanges. But I know there will always be investors who want to take the “next step,” to go a bit further down the rabbit hole and find digital assets that are much earlier in their development.

For that reason, I took the step of adding a second tier of access with this research product. In addition to all the research and recommendations contained within Unchained Profits, Pro readers will also receive additional blockchain recommendations and research.

The projects we recommend here are composed of opportunities that require slightly more involvement than simply pressing the “buy” button on a Coinbase account. Because of this, opportunities in the Pro subscription can result in larger gains.

With this level of service, my team and I will show how to store our digital assets, how to transact on the blockchain, how to generate yields 200x greater than what you can find at your local bank, and a whole lot more.

Consider your membership in Unchained Profits Pro as your masterclass in learning how to source, as well as act, on the most compelling opportunities in the space.

It will be an adventure. And my team and I will be helping you navigate this new frontier.

If you haven’t done so already, I’d encourage you to read our Unchained Profits Manifesto. It will help you understand the investment philosophy of this product and the types of projects we will be investing in.

By Jeff Brown, Editor, Unchained Profits Pro

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In the weeks and months ahead, I will be issuing a string of recommendations as well as resources. Investment recommendations will be issued as opportunities present themselves. And resources will be made available as they become needed.

I will always send research recommendations via email and through push notifications on our Brownstone Research mobile app.

Push notifications are by far the easiest way to be alerted to new research. If readers haven’t done so already, I’d encourage us to download the app and enable push notifications. The Brownstone Research mobile app can be downloaded for iOS devices right here and for Android devices right here.

Now, before I share today’s actionable recommendation, let me remind you of our risk management…

A Note on Risk Management

There will be no stop losses in this research product.

And unless we are taking profits, or something has fundamentally changed with our investment thesis, I will not recommend selling.

Our risk management policy will be to use rational position sizing. That simply means that an investor should only invest an amount that is appropriate given his or her portfolio size and tolerance for risk.

Digital assets can be volatile. It’s not uncommon for cryptocurrencies to move up or down 20%+ in a single day. In many ways, this volatility is the price of admission for investing in digital assets. We shouldn’t be surprised by it.

Deciding on a rational position size will be an individual decision, and I cannot give personalized investment advice.

More conservative investors may choose a smaller position size – even a few hundred dollars is perfectly fine. Other investors will decide to invest more. Investing in these kinds of digital assets should be considered as part of an overall asset allocation plan for each individual investor.

One critical recommendation is that I never recommend anyone go “all in” on any one investment. Our goal in Unchained Profits is to build a portfolio primarily of high-quality cryptocurrencies, and a select handful of small-capitalization stocks that are highly leveraged to blockchain technology.

And for Pro subscribers, we’ll be digging deeper to access the cryptocurrencies that have even more explosive potential well before they are listed on a major digital asset exchange.

With all that said, let’s turn now to our first addition in the Unchained Profits Pro model portfolio.

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Action to Take: Buy Nexo (NEXO) up to $3.00.Started to Trade: May 2018Current Market Cap: $1 billionProject Type: Finance ApplicationWhere to Buy: Matcha.xyz

The Company

Good luck generating any kind of interest in your savings with a bank today. Whether it’s through your savings account or a certificate deposit from your bank, it’s impossible to generate a yield of any significance.

Right now, the average yield on a savings account in the United States is just 0.06% – virtually nothing. Anyone holding their capital in a savings account is losing money each year when we account for inflation.

How did this happen?

When we keep our money in a traditional bank, we give the bank the right to leverage our holdings for a gain. This can take the form of letting other customers or businesses borrow the capital for renovating a home, purchasing an office building, or growing a business.

These loans generate profit for the bank. And because we, the customers, made this possible via our deposits, some of the profit gets passed along in the form of yield.

This is why banks have historically advertised their yield on bank deposits. They were competing for our hard-earned capital. But today, banks have eroded this yield to virtually nothing. And many are left feeling there is nowhere to turn.

This abysmal yield is the status quo for traditional banks. But thanks to blockchain, this is no longer the only option.

Traditional forms of interest-bearing products are being reinvented by the blockchain industry. And thanks to some ingenuity, these projects offer far better yields than what we can find from any bank today. And that brings us to our first Unchained Profits Pro recommendation.

The company is Nexo (NEXO).

And their mission is to create the future of finance today by bringing professional financial services to the world of digital assets. It is a company that uses a token to improve its relationship with its customers. By holding the token, users gain banking benefits and even a say in the future direction of the platform.

It is a novel way of using a token to pass on benefits to a platform’s user. Now, before we get into how Nexo operates and how its business model is ripe for success, let’s check out its backers.

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The Backers

Nexo is owned by fintech organization Credissimo who has been in business since 2007. The European Union-based company employs 160 and boasts 450,000 customers. Credissimo is known for its automated credit card approval system. Launched in 2010, the service allows customers to be approved for a credit card seven days a week. This makes them well equipped to run a platform like Nexo.

In 2017, Nexo launched with cofounder and former Member of Bulgaria Parliament, Antoni Trenchev. And became the world’s first instant crypto loan provider.

Shortly after, Nexo held an Initial Coin Offering (ICO) in April 2018. The team raised $52.5 million by selling its NEXO token. TechCrunch founder Michael Arrington was a major backer during this financing round.

The founders from Credissimo paired up with a very successful ICO financing round making the platform well-capitalized and equipped to transform online banking.

The Opportunity

The Nexo platform lets virtually anybody create an account and start using its platform from day one.

From the start, Nexo prioritized being a licensed and regulated financial institution. It is a Fintech business operating in more than 200 jurisdictions and across more than 45 currencies. The team registered their token sale with the SEC in 2018, which was considered somewhat rare at the time.

And they are even registered with the U.S. Financial Crimes Enforcement Network (FinCEN), various states and organizations within the United States, and various countries around the globe. All the compliance by the team enables a full suite of services for its customers. These services span borrowing, credit cards, savings and earning interest, and exchanging assets.

Nexo allows users to apply and gain access to funds instantly through its borrowing service without a credit check. Loans are available from $50–$2 million with rates starting at 6.9%.

Most importantly, the collateral required for the loan can be in bitcoin, Ethereum, USDC, or nearly 20 more digital assets. And the user can choose to accept the loan in more than 40 fiat currencies. This makes Nexo an easy-to-use global platform for banking services.

The Nexo credit card is another service.

The no-fee credit card is through Mastercard and is accepted by more than 40 million merchants worldwide. Through the Nexo platform, users can manage their accounts as the card’s balance is deducted from the user’s available balance. This makes crypto available for everyday purchases and the platform as a one-stop-shop for personal finances.

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The card also comes with bonuses – we are all familiar with such as 2% cashback, the ability to freeze the card, fraud monitoring, and more. This means users do not need to make any compromises when signing up.

The next service is savings and interest. This is the feature I find most interesting and sets Nexo apart from banking as we know it today.

To start, Nexo uses an industry-leading custody and security firm BitGo. This is how assets are safely stored on the platform. To help protect the assets, Nexo has a $375 million insurance policy with BitGo in the event of a hack, theft, or loss of private keys.

Insurance policies on crypto assets are very rare. This tells us Nexo is the entity paving the way for the industry.

They also employ biometric security, distribute assets geographically, and a host of other security features to make the experience safer.

Most importantly, there is the “earn” feature from Nexo, which is how users earn interest. By storing assets on Nexo, users earn up to 12% per year on fiat (i.e., U.S. dollars and Euros) as well as stablecoins and up to 8% per year on cryptocurrencies. This means your assets are working for you while safely stored away.

As I showed above, finding a 12% or even 8% yield from a traditional savings account is impossible today. The yield offered by Nexo on fiat currency is 200 times higher than the average yield from a traditional savings account.

It’s hard to imagine the difference being that large, but that’s the reality we are faced with today given how central banks around the world are artificially suppressing interest rates.

Finally, there is the “swap” feature. Users can exchange across 100+ crypto and fiat pairs without needing to move assets off the platform or to another exchange.

Nexo is clearly looking to attract capital to its platform and keep it there.

And what creates the sticky relationship between customers and the Nexo platform is the NEXO token, the platform’s native asset. Holding NEXO tokens allows investors to benefit from the success of the company.

And by holding the NEXO tokens, customers also gain access to higher yields and lower borrowing rates. Meaning if you are one of the 2 million customers, there is no reason to not hold the token.

We can see these benefits in the graphic on the following page. As we can see, NEXO holders benefit across the board.

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NEXO Token Increases Yields

Source: Nexo.io

Notice how the different benefits only kick in when a user holds a certain percentage of their portfolio – in fiat terms – in NEXO tokens. This will be important to understand when we look at what to expect from this investment.

What To Expect From This Investment

The NEXO token is how a user can benefit from the platform’s growing success.

That’s because, in addition to the benefits seen in the graphic above, the NEXO token has just added governance features about a month ago. This lets token holders vote on features they wish to see the platform add.

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Currently, Nexo and its cofounder Antoni Trenchev hold a monthly Ask-Me-Anything (AMA) event on reddit. This is where platform users can ask the company questions or mention features they would like to see. And it initiates the first leg of what can then turn into a token holder vote.

This means development is not a one-way street.

In terms of what we can expect for the token, it really comes down to the number of assets on the platform. That’s because users holding assets on the platform have an incentive to hold the NEXO token to gain access to additional benefits.

As of January 2021, the company stated they held over $4 billion in assets. And in December 2020 alone they added $762.6 million in new assets to the platform spread across 18,300 new clients. The pace of growth is remarkable.

And in May of 2021, Nexo announced that they crossed the $12 billion thresholds. That means the platform’s assets went from $4 billion to $12 billion in a matter of months.

This is in part why the token rose almost 400% from the end of December to the start of May 2021 while the entire crypto market cap grew by just over 200%.

The asset has since come down with the broader market. From a high of $3.80, NEXO now trades for under $2 as I write in late August of 2021. This gives us a great entry point for the next leg higher.

As I mentioned in our Unchained Profits Manifesto, the entire market will grow over the next decade. This is a once-in-a-generation trend.

And because the assets are spread across stablecoins and cryptocurrencies, it means as the market grows, the assets on the platform grow as well – as we saw earlier in 2021.

So if users want to maintain their current tier of benefits as the market grows, they will need to ensure their balance of NEXO tokens remains at a certain level of their entire portfolio.

This means that if NEXO’s price begins to dip, then platform users will look to purchase NEXO tokens to hold on to their benefits.

And if the total value of a user’s other assets increases, it will bring down the overall percentage of a portfolio denominated in NEXO. Again, this will incentivize more buying for users who want to maintain their benefits.

This helps put a floor in for the price of NEXO token. Also, as new users join the platform, they too will add NEXO tokens to their portfolio for similar reasons.

At the absolute minimum, I expect the Nexo platform to grow in tandem with the digital assets market. But the reality is that NEXO is growing far faster than the overall digital assets market, and I expect its own asset price to grow significantly faster, leading to a listing on a major exchange which will result in an even higher valuation.

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So let’s add the NEXO token to our Unchained Profits Pro portfolio today and ride the platform’s growth to new highs.

Where To Find This Asset

As I mentioned above, Unchained Profits Pro recommendations will often require a bit more work on the part of investors. Many of our Pro recommendations won’t be found on major exchanges like Coinbase. And that’s the case with the NEXO token, but the extra effort will certainly be worth it.

Nexo (NEXO) can be purchased using another platform that we recommended in Unchained Profits – 0x. We might remember 0x is a project sourcing liquidity throughout the blockchain. And by using its Matcha.xyz application we can purchase the NEXO token and hold it in a digital wallet of our choosing.

For step-by-step instructions on how to set up a wallet, transfer assets to the wallet, and purchase NEXO tokens from your wallet please use the Unchained Profits Pro User Manual guide. You can find that training material right here.

Let’s add Nexo to our portfolio of projects redefining finance.

Action to Take: Buy Nexo (NEXO) up to $3.00 using Matcha.xyz. There will be no stop loss for this position.

Risk Management: Because we will be holding this token without a stop loss, I encourage all readers to use rational position sizing. We should remember to never go “all in” on any one investment. Our mission is to build a portfolio of our companies. That’s how we’ll optimize our success.

As a reminder, these blockchain projects have a lot of volatility in token prices. We often see an initial surge in the price right after our trade alerts go out. But as we’ve seen with our other trades, we almost always get at least two chances to get into the trade at a good price.

So please don’t chase these assets higher if the price spikes. Instead, wait until the asset is at or below our buy-up-to price. As always, I will let you know if I decide to raise our buy-up-to price.

Regards,

Jeff Brown Editor, Unchained Profits Pro

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