Nexo
$1.34 -4.11%
NEXO · 3w

Dividends are betting AGAINST nexo token appreciation

You can invest $200 now and get 100 nexo tokens. Which would you rather have? 7 more nexo tokens... Or a $ value 12 months from now (derived from profit sharing) that then purchases nexo tokens at the current market rate 1 year from now? Go ahead and assume 10x on the dividend (unrealistic, but go for it). For a $200 million dividend. You'd make 40 cents per token... Or $40. What will the token price be 1 year from now? Want to be at a conservative $10? Your 7 nexo would be worth $70. Your $40 dividend would return 4 nexo tokens. More realistically... The token, from last year (using $2 - not the $4 from the all time high) is up 12x from 16 cents. The dividend is up to 4.5 cents per token from 1.3 (3x). If next year's pattern repeats, the token will be at $24. The dividend will be 13.5 cents per token. So you could have 7 tokens in 1 year. ($168). Or you could have $13.50 as a dividend. And receive 1/2 of a nexo token. Even if the interest rate drops to 1% (1 nexo), you're getting 2x the payout from the dividend (if the growth ratios stay the same - 12x token value to 3x profit gains). The dividend math simply cannot work in our favor if the token price continues to climb. You'll always be investing at a price 1 year behind the price of the payout. Would you spend $200 now for the number of tokens you'd receive at market value of nexo 1 year from now? Would you have done that last year? Put in $200 when the token was 16 cents (1250 nexo), but only receive 100 tokens today? The dividend is betting against the token appreciating. Long term, it will destroy the token. It prevents it from being competitive with btc and eth (appreciation speculation plus interest) on the nexo platform... The only platform the token has native value. Why would you want to make nexo the weakest token on the nexo platform?
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