Nexo’s Board of Directors has today approved a $100 million buyback program for its native token NEXO. According to the program’s terms, the company is now authorized—at the company’s discretion and effective immediately—to periodically repurchase NEXO on the open market.
It is expected that the program will be completed within the next six months after which the Nexo Board of Directors may decide to prolong the buyback, the company said in a press release shared with Decrypt.
"The buy-back program [...] reflects our strong financial position and underscores our ability to simultaneously upgrade our products, maintain a strong balance sheet, and invest in alternative growth strategies, all while providing significant utility and growth to NEXO token holders,” Antoni Trenchev, co-founder and managing partner at Nexo, said in a statement.
NEXO token is an Ethereum-based ERC-20 token used to pay out dividends from earnings on the platform. The asset’s current market capitalization is $1.86 billion, per CoinGecko.
The company said that the repurchased tokens will be used for strategic investments via token mergers, as well as for daily interest payouts to clients who receive their yields in NEXO.
The company won’t be able to use those repurchased tokens immediately though, as each buyback tranche will be placed in the company’s Investor Protection Reserve (IPR) with a vesting period of a minimum of 12 months.
This is Nexo's second token repurchase initiative following the completion of a similar $12 million program earlier this year.
All tokens repurchased within the program can be tracked through a dedicated ERC-20 address.
Boosting NEXO’s value
The latest buyback program is a core element of Nexonomics 3.0, the third phase of the company’s ongoing tokenomics initiative, which aims to enhance the token’s utility and value.
According to the company, following its first Nexonomics initiative, the native token rose in value by 2,430%, soaring to an all-time high above $4 in May 2021.
At the time of writing, the native token is trading hands at about $3.32, up 2.8% over the last 24 hours.
The NEXO Governance Vote, which allows token holders to indicate their preference for daily payouts of up to 12% in NEXO tokens, was introduced during Nexonomics 2.0. The proposal passed with 90% of voters indicating they were for the proposal.
Alongside the company’s tokenomics efforts, the company is also actively investing in crypto projects and crypto-adjacent firms.
Just last week, the company acquired a stake in SEC-registered broker-dealer Texture Capital. Earlier this year, Nexo also made strategic investments in decentralized digital asset infrastructure and technology provider Qredo and DeFi project Yield Protocol.