Are you ready for the mother of all short squeezes?
>nexo take chainlink deposits and offer 5% interest >sell chainlink deposits to fiat and lend it out at 10-15% >as long as LINKUSD remains stable they can continue to make 10-15% on loans, pay 5% on deposits and all goes well
Suddenly the LINK pop last week
>now nexo owes more LINK than the fiat they hold against it
>massive synthetic LINK short, if it keeps going up NEXO will be insolvent >people who have deposited LINK on nexo will not be able to buy it. NEXO have already stopped paying out interest in LINK -> MAJOR RED FLAG
To attempt to salvage themselves, nexo do the following
>short LINK using aave (which itself is powered by chainlink smart contracts top kek), release FUD report which has been thoroughly debunked at this point
Now they’re hoping that if LINK declines they will profit off their short and be able to honour user deposits once again.
However....
>nexo are short a large chunk of link through aave, in addition to all the idiots who shorted, sold or swung LINK on the report itself will all need to buy back in soon >IN ADDITION if/when nexo goes insolvent and can not pay user LINK deposits, there’s another bunch of people who have lost their link and some will want to buy back in
This will result in a major short squeeze. I’m thinking end of August when the Microsoft partnership, oracle partnership and staking are announced.
Buddy, the entire market found out about Nexo's 350k short, and guess what happened? The opposite of a short squeeze: an almighty stinky dump.
Justin Sullivan
Time will tell. In principle this should be straightforward and Nexo should get rekt now they're exposed, but the market is stupid. The scammers seem to have endlessly deep pockets to do this and whenever LINK goes down they can leverage more. 10% of all LINK on Aave is now borrowed, and that used to be nearly 0%. I think if anything saves us now it's trading bots carrying up the price if BTC moves.
Luke Edwards
>In principle this should be straightforward and Nexo should get rekt now they're exposed see The market saw Nexo making a big short, and decided to play right into their hand.
Tyler Peterson
If they're smart they close the short somewhere in the coming 2 weeks and secure profit. LINK is probably going back to the $6 range. They must be feeling the pressure though. Just imagine if some big company suddenly tweets about LINK like last year with Google. So many people got rekt. Nexo probably shorted with high leverage too so I guess they are sweating bullets.
Luis Morris
Proof that they sell LINK deposits in fact you missed it being posted yesterday
That dump wasn't the market, it was Nexo itself. Yesterday the LINK borrowed on AAVE went up before each big sell. They were borrowing LINK, selling it, then re-leveraging by taking more.
Mason Jones
So who the fuck was pumping link? Who was the :~) guy?
Nolan Clark
Good theory, but Link is still too high at $7.45
You don't seem to remember that we literally jumped from $5 range. It would have to dump more
Alexander Hill
Many alts took a dump at the same time yesterday. I wouldn’t say it’s anything chainlink specific.
>Link is still too high at $7.45 Link is consistently a top 2 coin in key metrics like volume, twitter mentions, research spending, code commits, ...
Link is seriously undervalued.
Ryder Campbell
So glad I never deposited any LINK to nexo. I have about 20% of my stack on crypto.com and comfy with them. Infinitely more of a professional company.
David Kelly
I'm not arguing about that. I'm arguing that for NEXO's "fud strategy" Chainlink valued at current price is still too high for them to play this game.
Julian Harris
>Are you ready for the mother of all short squeezes? moer like the mother of all dumps kek
Caleb Gonzalez
Not your keys not your coins
Dylan Stewart
Nah
Alexander Moore
looks like btc is making a move now that would be the nail in the coffin for nexo
John James
Bump
Jaxon Evans
Just release 120 page long FUD research paper on Bitcoin, that should do the trick.
Justin Flores
Additionally, that's not how large players work. Whales have to deal with slippage and fish for liquidity, and that means looking for liquidations in the opposite direction. If all the autism we've discovered here made its way to a big investor and it probably won't, they would take the opportunity to crack the short, not play along like some of us did with our lunch money, because at the end of the day slippage is real, all active shorts must be closed with an equivalent buy and having a huge active short in play waiting to close is a massive risk to sell into.
Jose Smith
Sold my nexo for LINK, thanks.
Christopher White
$10k on the way to coinbase. Going to become second lieutenant today.
Henry Hill
kek
Brandon Roberts
That's a lot of explaining.
The simple fact is the market was extremely aware of Nexo's short, and decided to play right into their hand anyway by mass selling. Nexo made out like bandits.
Colton Thomas
Every short must be closed. If you are to make money off this you either are dealing with significantly less volume than nexo so as to be able to ride the wave and exit in time or you become the zero-sum source of their profits when they close the short. By buying and liquidating them their position gets taken away and integrated into the market you just bought into - you take money from them. That's just how it works. There is no playing along with them, this is a zero-sum game. If anyone with money knew they could liquidate this irrational short they would.
Matthew Walker
Nexo, as far as we can tell, are still short. They probably need LINK to get back to 5-6 dollars to be able to honour users link deposits.
If LINK doesn’t sell off further they’re toast
Xavier Sanders
This. Not your keys not your car
Kevin Richardson
Can nexo defaulting have far reaching effects on the crypto space? Could them defaulting affect coinbase or binance?
Jose Ward
Bad news - they just took a new loan. Good news - this one wasn't as big as the previous ones, maybe they're running out? Or getting from elsewhere.
Isaiah Morales
It won’t affect coinbase or binance
It would affect individuals who have deposited on nexo primarily. I don’t think that’s a huge group of people.
