Welcome Coin Bureau readers to another edition of our versus series where we compare the top crypto exchanges, DeFi and CeFi platforms, to help you figure out which platform is best to suit your crypto needs.
Today we will be covering two of the biggest names in the crypto lending space, where crypto holders can lend, borrow, spend, buy, and more. We will be doing a high-level side by side comparison of Nexo and BlockFi.
Disclaimer: I use BlockFi and Nexo and hold the NEXO token as part of my personal crypto investment strategy. I would like to highlight the risks with both platforms in the form of centralization/custodianship, hacks, mass default/liquidation events, and unknown changes in the regulatory landscape.
Page Contents 👉
- 1 Overview: BlockFi vs Nexo
- 2 BlockFi vs Nexo
- 3 BlockFi vs Nexo: Platform Features
- 4 Other Features
- 5 BlockFi vs Nexo: Fees
- 6 Nexo vs BlockFi: Support
- 7 BlockFi vs Nexo: Web and App Layout
- 8 Nexo vs BlockFi: Security
- 9 Closing Thoughts and Verdict
Overview: BlockFi vs Nexo
|Headquarters||New Jersey, USA||Zug, Switzerland|
|Lending APY (Earn)||Up to 11%||Up to 17%|
|Assets available to Earn||23||32|
|Borrowing Interest||As low as 4.5% (Plus 2% Origination Fee)||As low as 0%|
|Assets available to borrow||1 (USD or USD Stablecoin)||36|
|Crypto Card||Yes (US Only)||Yes|
|Registrations and Regulations||Multiple state licenses, Bermuda Monetary Authority,||U.S Financial Crimes Enforcement Network, FINTRAC, ASIC, multiple US State licenses|
|Security||Third-Party Custodial Cold Storage, ISO certified, Insurance via third-party||Military-grade Class III vaults, Third-party Audits, ISO certified, Insurance via third-party|
|Fees||Fees exist for purchases, withdrawals and spread of approx. 1%. 1 free crypto withdrawal per month. $20-$30 fiat wire withdrawal fee.||Fees depend on loyalty tiers, fees exist for purchases, withdrawals and spread. This info can be found on their fee information page|
|Supported Countries||Global- Interest accounts are currently unavailable to new US residents as BlockFi works with US regulators||Global-Excluding Bulgaria, The Central African Republic, Cuba, Estonia, Iran, New York, Vermont, North Korea, Syria|
BlockFi vs Nexo
BlockFi and Nexo are both great platforms that are built by reliable companies. The teams behind both companies have extensive experience in FinTech and traditional financial industries. The leadership teams of both platforms have experience working in leadership roles for massively successful FinTech companies before starting these crypto lending platforms.
Both platforms follow the highest standards available in the industry when it comes to security, which we will cover later on. With such robust security protocols in place, customers can be confident in the safety of their funds. Both companies are highly respected in the financial and crypto communities for their innovation and being leaders in the space. Each platform must be doing something right as they have both experienced incredible growth in terms of profitability, valuation, and adoption.
The teams behind both platforms have a keen focus on regulation, working with regulators and the authorities to ensure they remain on the friendly side of the law. It is important to note that BlockFi has recently been handed a fine of 100M dollars from the US SEC, which has been paid. Now BlockFi is eagerly working with the SEC to bring their company within regulatory compliance as soon as possible.
Due to this, new US customers are not eligible for BlockFi’s interest accounts. However, they can still access the loan and crypto credit card products if you are located in one of the supported jurisdictions.
Until BlockFi sorts itself out with the SEC, I would recommend US-based users consider Nexo. However, be aware that US users on Nexo can only earn interest payments “in-kind”, meaning that they can only earn interest payments in the same asset that was deposited or purchased; they are not eligible for the extra 2% APY boost by earning in NEXO token as it the NEXO token is registered as a security.
In terms of which platform is best for users in different countries regarding legalities and licenses, Nexo has a seriously impressive list of licenses and is registered with a large number of global regulatory bodies, too many to list, in fact. You can find details on their licenses and registrations page.
It appears that the team at Nexo have performed some pretty incredible regulatory gymnastics and had the foresight to see the regulatory crackdowns that would be happening well in advance and have taken appropriate measures to stay a step ahead, which is how they have remained compliant while companies like BlockFi, Celsius, and Voyager have been receiving fines, cease and desist warnings, and have come under investigation from the Authorities.
Nexo also received a cease and desist warning from the New York Attorney General, but it was quickly dismissed and shrugged off by Nexo as their response was that residents of New York were already not allowed to use the platform and geo-blocking IP addresses had been in effect long before the warning, so there was nothing to “cease or desist.”
Both platforms are suitable for global users. While Nexo holds licenses for multiple specific countries, BlockFi is able to serve international customers through their “BlockFi International LTD” arm of the company which holds a class F license from the Bermuda Monetary Authority allowing for global customers outside of the US to sign up. According to their terms of service, the only countries not supported by BlockFi are those under sanctions from the US and/or Bermuda.
Strictly for peace of mind that the government isn’t likely to come door kicking for your crypto holdings, I would personally recommend Nexo for Canadians due to their FINTRAC registration, Australians due to their ASIC registration, and probably for most Europeans due to Nexo’s headquarters base and strong presence in Europe. BlockFi is making strides in playing ball with more global regulatory bodies, but for the time being, Nexo has them beat by a mile.
As far as lending and borrowing go, along with services to institutions, these platforms are quite different. While providing similar services, the specifics of each product and rates vary greatly, which will be covered later on. One thing I really appreciate about Nexo that cannot be said for BlockFi is the treatment of retail customers.
BlockFi has made it clear that its focus is on catering more for businesses, institutions, and high net worth clients who can choose to receive special treatment and privileges not available to smaller retail customers. Though I can’t say I fault them for that, I guess as this was their choice to target that demographic, and at least they are transparent about it, unlike banks who also play favourites but do it via shady back door deals and dark alley handshakes.
From what I can tell, Nexo doesn’t appear to play favourites based on wealth; they treat whales with deep pockets no differently than minnows with fewer funds as perks are based on percentages, not dollar value like on BlockFi. Both platforms use a tier system that determines APY rewards. With Nexo, the reward tier is based on the percentage of a customer’s portfolio in the platform’s NEXO token, while BlockFi tiers are based on the amount of holdings, and they do not have their own token.
Alright, now that you have a good lay of the land, let’s get into some of the specifics.
BlockFi vs Nexo: Platform Features
As for the core features, the two platforms are similar in services offered. Users can lend, borrow, swap, and spend on both platforms. When deciding which one to use, you should consider your location to ensure that the feature you are interested in is supported and make sure the platform supports your favourite assets.
Another critical factor to consider is what feature is most important to you. For example, if a high earning APY is your primary goal, then Nexo will likely be your choice, but if you are looking to borrow 10k+ against your crypto holdings, then BlockFi may be for you. When it comes to borrowing, check closely and read the fine print for both platforms to ensure that the digital assets you hold are supported as collateral, and the asset you want to borrow is available.
As mentioned above, Nexo has a loyalty tier level system that users can reach depending on what percentage of their portfolio is held in the NEXO token. Keep the following diagram in mind as you read through the article as these levels have an impact on earning and borrowing:
You also don’t need to choose one over the other, as nothing is stopping you from signing up for both! If you prefer the asset support on Nexo, you can put your hodl stash there while taking a loan out with BlockFi. The choice is yours! Luckily, Guy has swung some deals from both platforms to provide the Coin Bureau community with some awesome perks.
Sign up to Nexo using this link and get up to $150 in free BTC!
Sign up to BlockFi using this link and get a $250 bonus!
Nexo vs BlockFi: Crypto Lending/Earn
The ability to earn passive income safely and securely without having to learn the complexities behind crypto self-custody and DeFi is one of the reasons people love these platforms, and they have exploded in popularity. Additionally, both of these platforms pay user’s an attractive APY simply for hodling. Here is how these two platforms stack up.
Both platforms have the option for users to earn in-kind, meaning if you hold Bitcoin, you can earn Bitcoin; if you hold Ethereum, you can earn Ethereum etc. In addition, Nexo provides a nice little boost for non-US customers where you can earn an extra 2% on your stash if you are happy to earn your interest in NEXO tokens.
BlockFi has an awesome feature that I really like called Interest Payment Flex which allows customers to choose to receive interest payments in different assets as long as they are supported on the platform. I love this feature because it provides users with the flexibility to earn interest in crypto for the stablecoins they may be holding. Many crypto holders keep a portion of their funds in stablecoins to purchase more crypto on the next dip, but many crypto users have no interest in earning interest in stablecoins. I’ll take my interest in sweet Bitcoin or Eth over a stablecoin any day.
I try and keep these reviews as unbiased as possible and keep things objective. I don’t have a favourite platform between the two and do not gain anything by promoting one over the other, but there is no avoiding the fact that Nexo has significantly better APY rates than BlockFi and absolutely crushes them in this regard.
Nexo has rates as high as a whopping 15% on some stablecoins such as UST, 10% on most other stablecoins, 34% on AXS, and 6% on BTC and ETH, to just showcase a few, and that is without the extra 2% you can earn in NEXO. Here is a look:
Image via Nexo
Nexo also supports 34 assets while BlockFi only supports 16, and I like that Nexo allows users to earn in other currency pegged stablecoins such as GBPX and EURX, while BlockFi only supports USD stablecoins.
To the disappointment of many BlockFi customers, myself included, BlockFi used to offer fantastic rates on crypto holdings, competitive with the likes of Nexo and Celsius, but they have repeatedly been lowering their rates and adjusting the tier limits.
BlockFi now only pays 1% on BTC holdings between 0.1-0.35 BTC and only 0.1% on BTC amounts over 0.35 BTC while paying similarly lower interest rates on ETH amounts over 1.5. BlockFi is pretty good with assets like MATIC, offering 11% with no limits and their stablecoin APYs are around 6-8 percent depending on the amount held. Be sure to check out their rates page to make sure you are happy with the amount of interest offered on the amount of crypto you hold. Here is a look at some of their rates:
Both platforms have daily compounding interest, which is a powerful tool to grow your wealth, but Nexo definitely has an edge in the earnings department in nearly every aspect over BlockFi. According to the Coindesk article featured above, BlockFi stated that the reason for lowering the rates was due to “changing market conditions,” which left rivals and customers confused as many other lending platforms did not change their rates. While it is not uncommon to see lending platforms adjust their rates by a percent or two to deal with changing market conditions, the extreme rate cuts from BlockFi left many feeling that there may be something else going on that led to the significant reduction.
Nexo vs BlockFi: Crypto Borrowing
Being able to borrow against your crypto collateral has become a key part of many crypto holders’ wealth planning strategies. But, unfortunately, most of us cannot simply “yolo” all-in on Bitcoin and hodl forever as we have pesky expenses such as bills that need to be paid, and I don’t know about you, but my local pub doesn’t accept Bitcoin for pints…Yet.
Before crypto lending platforms, crypto holders would need to sell crypto positions for access to capital, but those days are gone. Instead, borrowing against your digital assets can be done to finance large purchases, pay down debt, reduce crypto tax obligations, diversify your portfolio, buy more crypto and more. BlockFi has put together a fantastic section in its resource centre that outlines a plethora of different ways that customers can use crypto loans to their advantage.
With Nexo, if users become a Gold or Platinum member and keep their loan to value ratio under 20%, they can borrow for as little as 0%, which is awesome. However, for higher LTV loans, expect to pay 6.9-13.9% APR depending on loyalty level.
Nexo customers can borrow as little as $50 in stablecoins and $500 in fiat, making this the preferred platform for smaller borrowing requirements as the minimum borrowing amount with BlockFi is 10k. The maximum amount Nexo customers can borrow is 2M.
Customers can choose from 39 different assets for collateral which is huge, vs BlockFi’s 4. Customers can also mix supported assets for collateral which is really handy. For example, if half your stash is in BTC and half is in ETH or any of the other 39 supported assets, you can add them all together and borrow against the total value. Nexo credit lines offer customers the flexibility to pay back their credit with fiat, crypto, or both.
Nexo doesn’t charge an origination fee, unlike BlockFi, which charges a 2% fee on top of the interest. However, it is the loan to value and the tier status on Nexo that should be considered, as even without the 2% additional fee, there are scenarios where Nexo will be more expensive than BlockFi for borrowing. Here is a breakdown of the rates:
- 0% with LTV below 20% and users are a Platinum member
- 1.9% with LTV below 20% and users are a Gold member
- 6.9% with LTV above 20% for Platinum members
- 8.9% with LTV above 20% for Gold members
- 12.9% with LTV above 20% for Silver members
- 13.9% with LTV above 20% for Base members
- 4.5% + 2% fee with LTV below 20%
- 7.9% + 2% fee with LTV between 20%-35%
- 9.75% + 2% fee with LTV between 35%-50%
Nexo loans can be wired to a bank account, or stablecoin loans or credit lines can be paid out to the customer’s Nexo wallet, where they can withdraw it to another wallet/platform or use the funds how they see fit. In addition, Nexo has more flexible options in terms of borrowing choices. Customers can apply for the loan or get instant access to a flexible credit line once funds are deposited. Here is a look at the simple process:
Users can borrow funds on both platforms with no credit checks, credit history, or income verification as these are over-collateralized loans, and the platforms look at things such as loan size and the particular collateral being put up, plus of course, the LTV to determine interest rates and whether or not the loan can be approved.
This has become a large attraction to crypto holders who want to borrow and avoid all the red tape, restrictions, and delays the banks impose on their customers. Imagine walking into your bank and saying that you want a line of credit instantly approved for 0% without providing income statements or credit checks, and watch the bank staff stare at you like you have two heads. Yet, that exact scenario is possible with Nexo. Another reason banks are losing market share to crypto platforms.
With BlockFi, as mentioned above, the minimum borrow amount is $10,000, and I actually couldn’t find a maximum amount mentioned. As BlockFi works with institutions and has loans suitable for Bitcoin miners and Bitcoin ATMs, I would assume the maximum amount is likely followed by a whole lot of zeros. Customers can withdraw in USD or USD pegged stablecoins and have the funds wired directly to their bank accounts.
BlockFi boasts same-day decisions, so if you apply for a loan on a business day, you should hopefully hear back within that same day which is great, and I really like that neither platform penalizes customers for prepayments or overpayments. Customers have the freedom to pay back the entire balance as early as they want. On BlockFi, users can pay back their loan with crypto or fiat or refinance their loan. Here are the options to pay back the loan:
- Partial Payback: Customers can pay back a portion of their loan at any time. This will reduce the amount of interest paid monthly.
- Full Payoff: Customers can pay off their entire loan balance at any time. For loans with monthly payments, borrowers will only pay the interest accrued through the date it is paid off.
On BlockFi, customers can put up BTC, ETH, LTC, or PAXG as collateral. For example, here’s how much BTC a customer would need to offer up as collateral for a 10k loan based on a 50% LTV:
Unlike the lend/earn feature, there is no clear winner here as both borrowing options are appropriate for different customers. If you can keep the LTV below 20% and you are happy holding 5%-10% or more of your portfolio in the NEXO token, then Nexo is the obvious choice. Nexo is also the best choice for users needing under 10k and wanting more flexibility with a less rigid structure regarding borrowing and paying it back.
Because Nexo’s credit line is automatically and instantly approved once funds are deposited, and it’s just sat there waiting to be utilized, it is better suited for traders looking to borrow funds periodically when and if they need them to buy dips catch bull runs, etc. Nexo also has more to offer in terms of supporting far more assets for collateral and being able to borrow in over 40 currencies vs BlockFi, which only supports USD.
BlockFi’s loans are better suited for more significant capital needs and for users who prefer the rigid structure of a loan vs the fluidity of a line of credit. BlockFi is also better suited for users who do not want to hold the NEXO token, as BlockFi’s highest APR is 9.75% plus the 2% origination fee, which is less than Nexo’s 13.9%. That 2.15% difference has a significant impact if you are looking at taking out 6 figure or million-dollar loans, which is why BlockFi is the preferred lending platform for institutions and big-ticket purchases.
With the primary lending and borrowing products out of the way, let’s look at some additional icing on the cake features offered by these two.
The Nexo Crypto card is one of the most popular crypto cards on the market. Users can get up to 2% cashback on their purchases anywhere that Mastercard is accepted. I really like this card for travelling as purchases can be made in local currencies, so it is like having a local bank card every time you enter a new country. Using a traditional banking debit or credit card overseas is often a costly endeavour and should be avoided unless you have an exceptional bank card.
There are no monthly, annual, or inactivity fees with the Nexo card. It works just like any other debit card; the payment amount is deducted from the available balance of your Nexo account.
This works differently from pre-loaded crypto cards that require pre-loading, such as the Crypto.com and Binance crypto cards. I also really like that the Nexo card gives customers the option to receive their cashback in NEXO or Bitcoin.
Here is a breakdown of the benefits of the Nexo card:
- Accepted by 40+ million merchants
- Freeze/unfreeze the card
- Free virtual cards
- Real-time transaction monitoring
- Zero fees
- No foreign transaction penalties
- Instant cashback on all transactions
- Host of security features
The BlockFi Visa crypto credit card is a Titan in its own right and is in a league of its own. I sure wish I could get my hands on one, but they are available to US residents only at the time of writing. However, you can sign up for the waiting list as they plan to launch for international customers soon.
While crypto cards are a dime a dozen these days, the BlockFi card remains special. BlockFi was the first company to ever issue a crypto credit card, and to my knowledge, I believe this is still the only crypto credit card in existence. While other crypto cards are Visa/Mastercard debit cards and are either pre-loaded or convert crypto to cash, the BlockFi card is an actual credit card that gives users unlimited 1.5% cashback in that sweet digital gold Bitcoin.
The BlockFi card has no annual fees, and there are no foreign transaction fees, making this card a great “go-to” while travelling. Users can also earn 3.5% cashback (or crypto back, I guess) during their first 3 months.
Here is a summary of the BlockFi card benefits:
- Unlimited 1.5% cashback, 3.5% for the first 3 months
- No fees
- No foreign transaction penalties
- Real-time transaction monitoring
- Accepted anywhere that accepts Visa
- Cardholders can select the crypto they want cashback earned in
On Nexo, users can earn up to 0.5% cashback on their swaps depending on their loyalty level, which is a very cool feature. There are over 300 market pairs available, and swaps can be made instantly and with ease. Nexo uses a fixed-price execution fee model, meaning users will pay the fee they see with no nasty surprises after the swap is complete. In addition, Nexo uses a smart routing system that connects to 10 different exchanges, providing users with the most cost-effective swap option.
BlockFi also allows users to perform swaps easily on the platform. Admittedly, the 15+ supported assets aren’t quite as impressive as Nexo’s massive catalogue, but they have the basics such as BTC, ETH, ADA, SOL, MATIC and of course, DOGE, covered so as long as you stick with the blue chips, BlockFi is a great place to swap tokens.
One nice feature with BlockFi is that you can set up automated buys and swap to take advantage of dollar-cost averaging, setting up repeat buys daily, weekly, or monthly.
Crypto Purchase Methods
Purchasing crypto directly from a debit/credit card or bank transfer is only possible on Nexo. BlockFi users will need to deposit USD first via wire/ACH, which is then converted to stablecoins, and from there, users can access the swap feature to pick up crypto.
Nexo offers a great perk, allowing customers to earn 0.5% cashback on purchases depending on loyalty level. Depending on how much you are purchasing, this can make purchasing crypto essentially free or even profitable if the 0.5% cashback is more than the fees associated with purchasing.
Customers can purchase 38 crypto assets on Nexo. Note that card purchases are unavailable for US residents, though bank transfers are supported.
BlockFi customers can fund their account with USD via wire transfer/ACH and then access the exchange platform once the funds reach their account, which can take 1-3 business days, then exchange for any of the 16+ assets supported.
Institutions and Whales
This is one of the key areas that set BlockFi and Nexo apart. While BlockFi does cater to smaller retail, it offers special benefits and perks to institutions, companies, and high-net-worth clients with over 3M in investible assets. So if you are someone with deep pockets or run a business and are looking to leverage your crypto assets in the most efficient way possible, then BlockFi is definitely worth considering. I won’t cover the details of BlockFi’s institutional or high-value services in this comparison article, as Nexo has nothing similar to compare it to, but you can find out more about it in our detailed BlockFi review.
Nexo has a feature that allows customers to utilize leverage, something BlockFi does not have. Customers can boost their portfolio by 3x using leverage, plus earn 0.5% cashback for doing so.
Nexo users can use their current holdings to buy up to 3 times more of their favourite digital assets by financing the purchase through their crypto-backed line of credit. This is a feature that, if used properly, can help users acquire triple the crypto without the need to put up extra capital.
BlockFi vs Nexo: Fees
Neither platform charges fees for depositing crypto onto the platform or for simply holding while earning APY, making these both great for long term, fee-free earning. The only fees encountered will be from crypto purchases and withdrawals. For Nexo fees, these will be encountered when purchasing, withdrawing and exchanging.
Users can expect Nexo fees between 1.49%-3.49% depending on user location when purchasing crypto via card, plus a spread for when the fiat is swapped for crypto. Here is a list of countries that cannot purchase crypto on Nexo via card. There are no fees for bank transfers, though your bank may charge for this service.
For withdrawal fees, Nexo offers free withdrawals ranging from 1-5 per month, depending on loyalty level, and withdrawals over those limits will incur network fees. Here is a summary covering what to expect for Nexo fees:
- No prepayment or origination fees on borrowing.
- Loans repaid in less than 30 days are charged interest for the remainder of the 30-day period at 13.9% regardless of loyalty tier.
- Crypto transfers between Nexo Accounts are free.
- Network fees will be charged for going over the free monthly crypto withdrawal limit.
- Unlimited free FiatX, crypto and credit line transfers into your Nexo wallet.
- 1.49%-3.49% on crypto purchases made with card.
On BlockFi, customers get one free crypto withdrawal per month; then, the fees depend on the asset. You can see the details below:
As for BlockFi fees, wire withdrawals for domestic wires will have a $20 fee, while international wires will set you back $30. On the other hand, there are no fees for ACH transfers which is pretty nice, and note that BlockFi states that these fees are charged on behalf of their partner, not BlockFi themselves.
Here is a summary of what you can expect for the main BlockFi fees:
- $20-$30 fiat wire withdrawals.
- Fees after 1 crypto withdrawal per month.
- Visa late payment fee up to $25.
- Visa return payment up to $37.
- Late fees on missed loan repayments.
Nexo vs BlockFi: Support
Nexo offers fantastic support via their comprehensive FAQ and knowledge base section, featuring great video tutorials and articles. I also appreciate Nexo’s live chat support, which I have used and received a response and resolution for my query within minutes, so kudos to the Nexo support team.
The Nexo support team can also be reached 24/7 by submitting a ticket/email support if live chat isn’t your thing.
BlockFi also has a well built out resource centre with FAQs and knowledge articles that should answer most questions. The BlockFi support team can be reached via email, ticket support and even live call support which is excellent. There are many different departments that users can reach out to depending on their query; all that info can be found on their Contact Us page.
The support reviews for Nexo appear to be generally quite good, according to sites like Trustpilot and Reddit. However, while BlockFi reviews are pretty mixed, there are quite a few reviews that are less than flattering regarding BlockFi support, and even from my own experience, I once had to wait well over a week for a response to an email ticket I had submitted, so perhaps there is room for improvement on that one.
BlockFi vs Nexo: Web and App Layout
Both Nexo and BlockFi have web platforms and mobile apps available on IOS and Android. Both web and mobile apps platforms are incredibly beginner-friendly, well laid out, clean, and could not be more simple to use. Here is a look at the BlockFi web platform:
I cannot fault either platform for their user experience; they are both well designed. The BlockFi site is so simple to navigate that I almost feel like I could do it with my eyes closed. Here is a peek at what the Nexo web and mobile platform look like:
Nexo vs BlockFi: Security
It doesn’t matter how good either platform’s features are if the security is shoddy and there is a high risk of losing your funds and all the interest earned! Fortunately, both Nexo and BlockFi follow industry best practices and place a strong emphasis on security.
Nexo has partnered with multiple custodial security solution companies such as BitGo, Ledger Vault, and Bakkt, among others, to spread risk and ensure customer funds are well protected. In addition, Nexo carries $375 million in insurance through third parties to protect users. Through Nexo and Third-Party custodial solutions, here is a breakdown of Nexo’s security features:
- Air-gapped cold storage with bank-grade Class III vaults
- SOC 2 type 2-certified custodianship program
- $375,000,000 in insurance via third-parties
- Customer information is stored with limited personnel access
- Security management system and monitoring that is ISO/IEC 27001 certified
That is how the company keeps funds secured on the back end. On the front end, here are the security features on Nexo that users can enable to ensure their accounts remain as safe as possible:
- 2FA Authentication: SMS verifications, email verifications, authenticator app support
- Biometric Identification
- Withdrawal Confirmations & Log-in Alerts
BlockFi utilizes Gemini as its primary custodian, which gives customers heaps of confidence as Gemini is one of the largest and most well-respected crypto custodial firms and is regulated by the New York State Department of Financial Services (NYDFS). As a result, Gemini is trusted with billions of dollars worth of digital assets by some of the biggest names in the industry.
BlockFi spreads risk by utilizing Coinbase as a secondary custodian and carries insurance for customer funds. Here is a breakdown of BlockFi’s security features:
- SOC 2 Type 2 certified secure solutions
- 95% of assets are kept in air-gapped cold storage
- Behind the scenes, analytics to monitor risk on the platform
- PII withdrawal verification
On the front end, users can (and should) enable the following security features:
- 2FA via an authenticator app
- Whitelisting/Allowlisting withdrawal addresses
- Biometric authentication
At the time of writing, there have been no known successful hacks resulting in loss of user funds on either platform, which is always a good sign.
Closing Thoughts and Verdict
Both these platforms are seriously good at what they do, which is why they are two of the largest crypto lending platforms in existence and have both absolutely exploded in valuation, growth, popularity, and profitability. If you want to dig deeper into different crypto lending and borrowing platforms, feel free to check out our Top 5 CeFi Platforms article.
But of course, each platform has its pros and cons and who they are better suited for. For the average person, I think it is quite clear that Nexo is the obvious winner because they offer significantly higher returns on crypto holdings. In addition, they have far more flexible options for borrowing funds regarding what can be put up for collateral and what funds can be borrowed.
Nexo borrowing offers more flexibility due to the readily available and liquid crypto credit line. Nexo also has far superior asset support, more options for buying crypto, swapping assets, and withdrawal methods.
But if I had millions worth to invest or was a company looking to borrow for business capital, I would definitely reach out to BlockFi first as they mention how rates and terms are “negotiable” for high-net-worth individuals and businesses, so I’ll bet they can offer some pretty sweet deals.
The BlockFi credit card is also amazing, but in my opinion, it is not enough to make up for the fact that they have reduced APYs to insultingly low, almost pointless levels. They are offering interest rates so low on some assets that it seems like they are competing with the bank’s pitiful savings accounts and not other crypto lending platforms that still offer great returns.
Due to the repeatedly lowered interest rates and the fact that BlockFi treats small retail users second rate to larger holders, showing favouritism to clients with deep pockets, I have to admit that I feel that there are better lending platform options for your average Joe and would recommend Celsius or Nexo over BlockFi at this time. I used to really like BlockFi and hope that they will become more competitive for retail users in the near future. If you are interested, we also have a Celsius vs Nexo article if you are tossing between which one is best for you.