Nexus Mutual is a decentralised insurance protocol that allows users to protect themselves against smart contract risk. Users can share risks without going through an insurance provider using the Ethereum blockchain. In reality, it's a form of insurance, but the team can't refer to it as such for legal reasons. It's also different in many ways from how we usually think of insurance.
The Nexus Mutual platform is totally managed by its members, who decide whether claims are legit and have their choices recorded and enforced by smart contracts. This means that claim payments are made based on the value of a token, so there is no need to trust an insurance company. All members of the mutual have membership rights that are backed by contracts and shown by cryptocurrency tokens that are used all over the insurance platform.
Hugh Karp, who had extensive experience in the life insurance sector, established Nexus Mutual. Karp is joined by ten other people, and the company is backed by a number of well-known venture firms, such as 1kx, KR1, MilliWatt, and Kenetic.
In addition to project members and financial backers, there are also five people on an advisory board. The advisory board is probably the most controversial part of Nexus Mutual. This is because it is also the most centralising force in the system.
According to project communiqués, the members' "primary aim is to provide qualified technical advice to the mutual's members and, if necessary, execute emergency functions."
These members are Hugh Karp, Graeme Thurgood, Nick Munoz-McDonald, Rei Melbardis, and Nitika Arora. This body exists to help prevent malicious or false Nexus Mutual claims.
They can kick people out of the mutual and burn their tokens if they don't follow the rules.
Insurance, in all its forms, has become a crucial part of our daily lives. People trust insurance companies to keep them safe and protect them from bad things that could happen. However, this wasn't always the case. Prior to the existence of insurance firms, communities would pool their resources in an attempt to minimize their risks. All of the money raised was used to help the community and protect its members from unfortunate events.
Nexus Mutual was created with these ideas in mind. Unlike traditional insurance companies, the platform works like a mutual where members pool their assets together to protect against threats in the crypto ecosystem. In order to join the mutual, users need to pay a small fee of 0.002 ETH and fill out KYC/AML paperwork.
Right now, Nexus Mutual can cover any valid smart contract on Ethereum. Purchasing a policy is comparable to betting that a specific smart contract would fail.
It goes like this. Anyone can get a policy on a smart contract, whether they are using the smart contract or not. Payouts are not based on how much the person lost. Members who buy smart contract coverage may get a different sum than what was stolen or lost.
Users choose the type of smart contract, the length of time, and how much insurance they want. The price is then decided by Nexus Mutual. And if an exploit happens during that time, Nexus covers the claim. Nexus Mutual members must agree, though, that the smart contract is the problem and not something else.
Governance- Anyone who is a member of Nexus Mutual can vote or make suggestions that will be voted on by all members. All proposals are first reviewed by the Advisory Board, which makes a suggestion about how the proposal should be handled. The proposal is then put up for voting by the members over a certain amount of time. For the majority decision to be accepted, a predetermined quorum must be met. If not, the Board's recommended decision is carried out.
Staking- NXM token holders can put their tokens up as collateral to play two important roles in the system: assessing claims and assessing risks. These activities are similar to the idea of "mining" because members are compensated with newly created tokens for helping the Nexus Mutual community.
DATE NEWS/EVENTS IMPACT 26/04/2021 Insurance alternative Nexus Mutual follows DeFi activity to Polkadot, Cosmos, and Binance Smart Chain +35% Increase 17/09/2020 Nexus Mutual ran out of DeFi coverage -30% Decrease
Insurance alternative Nexus Mutual follows DeFi activity to Polkadot, Cosmos, and Binance Smart Chain
Nexus Mutual ran out of DeFi coverage
Nexus is a people-powered alternative to insurance that currently covers all of the main Defi protocols. In the future, it is expected to enhance the design of crypto-economics, the way prices work, and the earnings on investments as well. Nexus promises to advance technology while giving its members the most challenging products and the best protection.