The recent contagion in the crypto lending area can be one factor that contributed to NEXO’s weak performance. The DeFi crash was switched on by the recent collapse of Terra Luna and the uncertainty that surrounds Celsius Network. Nexo Finance, another crypto lending platform, is badly hit but reaffirms to its clients that the platform is safe and has no exposure to Three Arrows Capital (3AC). 

Nexo has denied the hearsay of exposé to the company and has 100% liquidity to fulfill its debt obligations. Based on a statement shared on Wednesday, the only collaboration the company has with 3AC, a Singapore-based crypto fund at risk of going bankrupt, was the partnership for an NFT fund which didn’t work as the fund failed to progress. 

Furthermore, just a day before Celsius halted the platform’s withdrawals, Nexo users reported that its app and website were down adding more speculations to its stability. The team quickly responded stating they are handling the issue. In spite of the FUD taking place in the DeFi sector, Nexo has shown signs of strength and even revealed having adequate liquidity to survive the bear crypto market. Nexo also proposed to Celsius a buyout of the protocol to help the company settle its obligations. Though Celsius might not consider a buyout because of the current revamping plans.