To gain durable decentralized liquidity, ethereum-based insurance platform Nexus Mutualstaked treasury funds worth $2 million in the form of wrapped NXM (wNXM) tokens in decentralized trading protocol Bancor.
Joining more than 30 decentralized autonomous organizations (DAOs) using Bancor’s treasury management solution, Nexus Mutual seeks to earn yield with its treasury deposit without selling its native tokens.
Hugh Karp, Nexus Mutual founder, acknowledged:
“Bancor doesn’t require any maintenance, is battle-tested and will ultimately drive higher income to our DAO and community due to there being no Impermanent Loss. We’re able to fund our pool with wNXM-only liquidity and attract loyal token holders as long-term liquidity providers without needing to sell tokens or issue incentives.”
Bancor is emerging as a sought-after DAO treasury management provider based on its “Impermanent Loss” guarantee. It uses an automated safe staking system where depositors earn yield from more than 150 integrated tokens. They include Chainlink (LINK), Synthetix (SNX), Basic Attention Token (BAT), and Enjin Coin (ENJ).
The decentralized liquidity arena is ticking
More players are entering the decentralized finance (DeFi) staking arena, given that Bancor paid liquidity providers more than $200 million in 2021.
Nate Hindman, a Bancor contributor, acknowledged that the decentralized liquidity route was the way to go and stated:
“We are very excited to have Nexus Mutual join the growing list of projects building sustainable decentralized liquidity for their tokens on Bancor. Both Nexus and Bancor are focused on designing decentralized solutions for risk-averse users seeking safe and reliable access to DeFi.”
With Bancor allowing DAOs to offer liquidity, they are able to safeguard their native tokens from sell pressure, enabling them to optimize the productivity of their staked funds.
Some of the DAOs supported include Harvest Finance, Paraswap, UMA, KeeperDAO, Saffron Finance, WOO Network, and Instadapp.
Institutions are continuously seeking the diversification of digital assets for maximum returns, per a recent Genesis report.
The study acknowledged investors’ promptness to expand their digital asset investments while demonstrating an avid interest in DeFi coins. Furthermore, institutional investors took a deeper approach to participating in the crypto market.
The blockchain-based insurance platform Nexus Mutual has revealed that it is set to expand its coverage beyond Ethereum and other blockchain platforms. On Monday, April 26, this development was announced and represents a significant switch in focus for the insurance platform.
Nexus Mutual expands to Polkadot, Cosmos, and Binance Smart Chain
Nexus will be providing insurance coverage for protocols on other smart contract networks, including Polkadot, Cosmos, and Binance Smart Chain (BSC). According to the insurance platform, the changes result from DeFi’s growing demand with “Protocol Cover.”
Nexus is also expanding its insurance services beyond smart contract hacks to include attacks on oracles which provides data that trigger smart contracts. Also, the platform will add insurance for other mishaps like governance failings.
Nexus uses the U.K’s legal framework of a mutual where members have no contractual obligations to pay claims. Instead, it utilizes a system where a pool of NXM token holders on the Ethereum blockchain stake assets against the likelihood of insurance claims. These holders earn rewards or make payments in the event a claim is approved.
Significant Development for the DeFi Ecosystem
Nexus’ decision to expand its insurance scope represents a major sign of the rapid growth of the DeFi sector. Initially, based on the Ethereum blockchain, DeFi protocols have begun to migrate to rival blockchains like BSC due to rising gas fees and slow confirmation times.
This has led to popular platforms likeSushiSwap, 1inch, and Uniswap to migrate to the BSC in recent weeks. It is understood that Nexus insurance will cover DeFi protocols that are multi-chain. For example, if Nexus lists a DeFi protocol like platform like 1inch that runs on multiple blockchains. The insurance will cover all the multiple blockchains providing comprehensive smart contract insurance.
Nexus CEO Hugh Karp further explains this notion in a recent interview.
“Some of them will already run on multiple chains, and so we’ll upgrade so that if a project is running on Polkadot or Cosmos or Binance Smart Chain, then we can start covering that.”
Nexushas witnessed massive growth in the past year, with the active cover provided by the platform currently at about $700 million, while the size of the staking pool is about $1 billion and fluctuates with the price of NXM.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Bitcoin lending service Hodlhaut has partnered with Nexus Mutual, creating a smart contract on Ethereum to provide insurance coverage to its investors.
Hodlnaut Buys Into NXM Pool
Centralized financial service platform Hodlnaut has joined forces with Nexus Mutual to provide insurance coverage up to $6.7 million at a premium of 2.6%.
The firms deployed an Ethereum smart contract Hodlnaut Custody Cover to offer coverage to Hodlnaut users in the event of more than 10% loss in hack or theft or withdrawal suspension of more than 90 days. Hodlnaut has pledged $1 million of equity to the partnership.
A major portion of the equity will be used to stake NXM in the smart contract to underwrite the insurance.
Additionally, Hodlnaut has announced $110,000 NXM in yield farming rewards for the smart contract’s early stakers.
Hugh Karp, Founder ofNexusMutual, wrote to Crypto Briefing:
“This partnership is another demonstration of how open financial products on Ethereum provide the building blocks for amazing customer experiences. Hodlnaut users will have an easy way to protect themselves whileNexusMutual members will benefit from increased distribution.”
Nexus Mutual recently expanded the business outside the blockchain to cover centralized exchanges like Coinbase, Kraken, Gemini, and Binance. The partnership marks another business merger between centralized services and the DeFi ecosystem.
Hodlnaut provides interest on Bitcoin, Ethereum, and two stablecoins in USDC and USDT by lending to institutional margin traders. In April 2019, the platform received a $100,000 pre-seed investment from Antler to kickstart the project.
Disclosure: The author held Bitcoin at the time of press.
This news was brought to you by ANKR, our preferred DeFi Partner.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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Decentralized insurance alternative Nexus Mutual received a $2.7 million boost to its foundation treasury, the not-for-profit umbrella organization charged with selling NXM tokens to fund core development of the protocol.
The strategic contribution was led by Collider Ventures with participation from Nick Tomaino’s 1confirmation, Blockchain Capital, Version One, Dialectic, 1kx and several angel investors.
Nexus started out focused on providing protection against risk and potential bugs in the smart contract code of decentralized finance (DeFi) projects. Recently, the startup announced it was extending its community-based offering to cover users for hacks and losses incurred at centralized exchanges like Coinbase, Binance, Kraken and Gemini.
The Nexus foundation previously raised $1.4 million from an NXM token issuance in 2018, bringing the total raised to date to $4.1 million.
When the early token sales took place, NXM was acquired by investors at around $2 per token. Since then DeFi has grown so rapidly with over $40 billion locked up in projects; NXM is currently trading at around $68, according to CoinGecko.
NXM is the governance token for the Nexus Mutual protocol. It is used to buy cover, vote on governance decisions and participate in risk and claims assessments. It is also used to encourage capital provision and represents ownership to the mutual’s capital.
“When Nexus launched, it granted a bunch of NXM tokens to our foundation, which has gradually sold them to cover operational costs,” Nexus Mutual CEO Hugh Karp said in an interview. “We expect to wind down the foundation as the protocol becomes more stable and fully decentralized.”
Karp said the $2.7 million token sale took place around December of last year, at the market value for NXM at that time, without stating the exact figure.
It has been a momentous year for Nexus. The platform saw its pool of capital covering risks within the DeFi ecosystem increase from $4 million to $100 million within the final five months of 2020.
Nexus Mutual has a very aggressive roadmap for 2021, Karp said, aiming to sell over $1 billion worth of cover spread across at least 30 protocols.
“We see Nexus Mutual as an indispensable pillar of DeFi … and decided to take a proactive approach to support the development of the platform,” Adam Benayoun, founding partner of Collider Ventures, said in a statement.
DeFi user Kferretcrypto has accused Armor Finance of denying a $1.6 million insurance claim.
The CEO of Armor Finance allegedly made false promises to the user in a private conversation.
Armor Finance says the claim is still active.
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DeFi insurance service Armor Finance has been accused of backing out of a $1.6 million insurance claim, according to one of its pseudonymous clients.
User Claims He Was Defrauded
Kferretcrypto, who says he was defrauded, attempted to settle an insurance claim concerning a Nexus Mutual investment. The user claims that his purchase, which he originally made for 13 ETH, is “now likely worth a 1000 ETH payout” ($1.6 million) due to a Yearn Finance hack that affected prices.
However, Kferretcrypto does not have direct access to the investment, as he turned it into an arNFT and staked it with Armor Finance to obtain insurance on his purchase.
Kferretcrypto has requested that Armor release his funds, claiming that he should be “free to withdraw and claim the cover as promised.” He also offered $125,000 to help reimburse Armor’slosses.
He claims that Armor initiated the withdrawal but eventually “backtracked” to keep the investment amount for themselves.
Armor Replies to Kferretcrypto
So far, Armor Finance has denied Kferretcrypto’s insurance claim. It says that during the relevant hack, “there was only 1 eligible arNFT that was submitted worth 1000 ETH.”
Armor’s decision-makers maintain that since none of its users incurred a loss in the hack, the claim amount belongs to its treasury. The team will add the 1000 ETH reward to its treasury reserve and acquire lost NXM due to the claim to preserve their stake. The Armor Treasury Reserve will also cover all or part for the 400 ETH claim pending Nexus Mutual’s approval.
Armor Finance has also introduced a new reinsurance scheme providing “coverage for coverage providers” for greater protection. However, according to Armor Finance, the claims are “owned by and owed to Armor,” giving it ultimate control over such matters.
That said, Armor Finance has also indicated that Kferretcrypto’s insurance claim is still active. It also says that conversations between Kferretcrypto and Armor CEO Azeem Ahmed were informal. As such, its stance on the matter might change in the future.
This is not the first controversy related to Anchor Finance. Previously, Ahmed was involved in the early sell-off of SAFE liquidity token, which caused Nexus Mutual to run out of DeFi coverage.
Disclosure: The author held Bitcoin at the time of publication.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
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The cryptocurrency market is waging its usual volatility war again and while some of the top-ranked coins are trading under bearish conditions, a few are taking advantage of the flow to add up some gains. While the entire cryptocurrency market is defined by a similar law of demand and supply, many coins have basic fundamentals and use cases that give them an edge at certain times when the market is experiencing a downturn.
The current rate of growth of Bitcoin and Ethereum is not positively correlated as Bitcoin is down by 3.02% in the past 24 hours to $34,715 at the time of writing according to CoinMarketCap while Ethereum is up by 2.32% to $1,308.19. The majority of the top ten coins trailed the bearish downturn of Bitcoin. However, the tokens Nexus Mutual (NXM), Hedera Hashgraph (HBAR), and Enjin Coin (ENJ) are amongst the biggest earners in the market today.
The Upward Tick Of NXM, HBAR, and ENJ
The Nexus Mutual token is up by 20.42% in the past 24 hours according to CoinMarketCap and it is currently trading at $41.58 per coin. While the NXM token does not enjoy a top ranking in relation to other tokens in the space, its growth over the past month has been impressive. The coin has rallied by 102.4% over the past 30 days and an additional 16.67% in the past week. Apparently, the use of the coin in the governance of the to buy a cover, vote on governance decisions, and participate in Risk and Claims Assessments on the Nexus Mutual Protocol is gaining remarkable traction.
Hedera Hashgraph (HBAR), another favorite in the market today has rallied by 51.75% in the past 24 hours and by 98.83% in the past week. At a current trading price of $0.09406, the HBAR token is obviously trading below its potentials, especially for a coin that is governed by a council of global firms including IBM, Google, Deutsche Telekom amongst others. With the current price action, however, the HBAR token may be attracting new bulls and HODLers.
Enjin Coin is also making noteworthy moves in the market today with a 42.52% surge in the past 24 hours, a surge that consolidates the 150.72% in the past week. For a coin whose mainnet launched back in June 2018, today’s performance may signal a move towards a new horizon for the coin owned by Enjin, a company that provides an ecosystem of interconnected, blockchain-based gaming products.
Coin’s To Watch For The Rest of The Week
As President Joe Biden takes office today, his appointees including new SEC Chair Gary Gensler will commence acting immediately. With the inherited lawsuit with Ripple, the reports that the new Chair would not be able to save XRP coin may further complicate the dwindling price growth of the coin. Ethereum is also an asset to watch as it soared past and fights to form new support at its all-time high price
DeFi coverage protocol Nexus Mutual expanded the list of centralized exchanges eligible for incident protection. Users trading on Binance, Kraken, Coinbase and Gemini are now able to buy protection in the event of an exchange hack or prolonged withdrawal downtime.
The project announced the new integrations on Monday as part of their “custody cover” initiative. Users who buy coverage will be eligible for compensation if the custodian gets hacked and the user loses more than 10% of their funds. Alternatively, the claim can be honored if the custodian suspends withdrawals for more than 90 days.
The program was launched at the end of 2020 and initially included centralized lenders like BlockFi, Celsius, Nexo, Ledn and Hodlnaut. To apply for coverage, users must become members of the Nexus mutual and undergo know-your-client verification.
According to current figures, coverage is quite expensive. For example, a Binance coverage claim for 10 Ether (ETH) lasting 365 days, requires paying a premium of more than 3 ETH, or 30% of the coverage amount. Still, these may be temporary figures. For example, yearly coverage cost for BlockFi and Celsius is just over 2%, while covering other providers is much more expensive. Given the overall positive track record of the exchanges added today — save for intermittent outage issues — it is likely that their cost of coverage would go down significantly over time.
It is also worth noting that Nexus is not an insurance provider. The difference largely comes from the fact that insurance has contractually defined clauses that establish how and when a claim should be honored. The decision to pay out claims in Nexus Mutual is solely at the discretion of the members and stakers. While in practice this may not be an issue, edge cases could put the system to the test.
The founder of Nexus Mutual, Hugh Karp, was recently hacked via a malicious MetaMask extension, with the attackers stealing a significant portion of his NXM tokens. Despite the requirement of KYC to transact with NXM, it appears that the attacker used a fake identity for verification.
Nexus Mutual is now offering cover for users of centralized exchanges.
Users will be able to make a claim if they suffer from loss of funds or halted withdrawals.
The protocol is operating as normal despite founder Hugh Karp’s recent $8 million loss in a hack.
The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner
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Nexus Mutual is now offering centralized exchange cover. The protocol will compensate users who lose 10% of their funds or experience prolonged withdrawal halts.
Nexus Mutual Expands Cover to CeFi
Nexus Mutual, DeFi’s most popular insurance protocol, has just added “custody cover.”
According to an announcement on the Nexus Mutual blog, the cover “will protect users who put funds into an organization which is responsible for the safekeeping of private keys to cryptocurrency assets.”
That includes major exchanges like Coinbase and Binance. The service went live today.
🐢Custody cover is expanding! Staking is now live for: @binance @coinbase @gemini@krakenfx
The cover will be applicable for two eventualities: an exchange hack in which the user loses more than 10% of their funds and withdrawals held in limbo for more than 90 days.
Nexus Mutual began as a platform that offered DeFi users cover when using protocols like Compound.
Thanks in no small part to the number of hacks DeFi has seen over the last few years, it’s become a pillar of the Ethereum ecosystem, regarded as a safety net for users who want to engage in activities such as yield farming.
Nexus Mutual is commonly referred to as DeFi insurance, though it labels itself as a “cover” provider for legal reasons. Members of the Mutual are responsible for approving or declining claims, and their voting power is calculated according to the proportion of NXM tokens they hold.
When a sufficient number of NXM tokens have been stake against a centralized exchange, users of that exchange will then be able to claim cover.
They can do that by purchasing cover and then making a claim for members of the Mutual to vote on whenever necessary.
DeFi Cover Still a Major Issue
To date, no DeFi protocol has offered comprehensive solutions for CeFi cover. Cover Protocol outlined its plans to offer broad coverage options outside of DeFi towards the end of last year, though this is yet to materialize.
The Cover team ran into issues when Grap Finance hacked the protocol for $4 million in late December before returning the funds. The project then relaunched their token for a third time (internal disputes and a so-called “rug pull” led them to rebrand the token from $SAFE to $SAFE2, then to $COVER).
Nexus Mutual, too, has suffered major problems of its own last month.
The protocol’s founder, Hugh Karp, was tricked into sending 370,000 NXM tokens to an attacker who’d created a fake MetaMask extension after gaining remote access to his computer.
Karp unwittingly sent the tokens, worth $8 million at the time, to the attacker.
It led to a dramatic hunt in which Nexus Mutual traced an IP address in Singapore, and the attacker demanded a $2.7 million ransom fee, though no culprit has yet been found.
Karp posted a post-mortem analysis, and the investigation is ongoing.
Still, Nexus Mutual is operating as normal, and funds locked in the protocol were not affected.
With the update for cover on centralized exchanges, it seems that the team is set on growing beyond the niche offering of DeFi protocols.
Disclosure: At the time of writing, the author of this feature owned ETH, WNXM, COVER, COMP, and a number of other cryptocurrencies.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
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Nexus Mutual, a startup that provides a decentralized alternative to insurance, is extending its community-based offering to cover users of well-established cryptocurrency exchanges such as Coinbase, Binance, Kraken and Gemini.
Until now Nexus, which uses digital tokens to revamp the traditional idea of mutual cover, was only focused on the world of decentralized exchange (DEXs), specifically catering to the explosion of decentralized finance (DeFi), which is susceptible to hacks and losses.
However, centralized exchanges also get hacked on a semi-regular basis, and traditional insurance cover within the crypto industry remains thin on the ground and prohibitively expensive. Indeed, for many large exchanges, the balance sheet is basically the insurance fund, as Kraken CEO Jesse Powell has noted.
Nexus takes a different approach, offering cover to users themselves, rather than relying on an insurance policy held by the exchange – or not, as the case may be.
“We are expanding to provide coverage for centralized exchanges, starting with the big ones like Coinbase, Binance, Kraken, Gemini, which is a product we’ve had really strong demand for,” said Nexus Mutual founder Hugh Karp in an interview.
None of the exchanges mentioned returned requests for comment.
How it works
Nexus Mutual takes a completely decentralized approach to what it calls “discretionary cover.” The firm employs the U.K.’s legal framework of a discretionary mutual, where members have no contractual obligations to pay claims. It applies this to a pool of digital NXM token holders, which uses the Ethereum public blockchain to track proportional ownership of the fund and a governance system to approve or decline payment of claims.
“You don’t have to rely on the insurance that the exchange may or may not be able to purchase themselves, you can come to Nexus separately and get covered, independently of the exchange,” Karp said. “Hopefully, we can provide a community solution to the existing limited-capacity sore point in the industry.”
The centralized exchange cover from Nexus will pay a claim if an exchange gets hacked and the user loses more than 10% of their funds, or if withdrawals are halted for more than 90 days, Karp explained.
“Currently, end users find it very difficult to assess the protections centralized exchanges have in place, like how much contingency funds do they hold back or what proportion of funds does the exchange have its own insurance on,” Karp said.
Nexus members can perform various roles, including being a customer by purchasing cover, assessing claims by voting or assessing risks by staking NXM tokens against specific risks. (For example, if you want to back Compound, you stake NXM against Compound; if you want to back Coinbase, you stake against Coinbase.)
“When the new product launches, Nexus Mutual risk assessors will first have to decide whether to back the risks by staking NXM tokens against them,” said Karp, a trained actuary and the former U.K. CFO at Munich Re. “The more secure an exchange is perceived to be, the more likely risk assessors will back it. Once sufficient staking has been established, cover purchases will go live and members of the mutual will be able to purchase cover.”
Nexus emerged sometime after the infamous DAO hack which rocked the Ethereum community back in mid-2016. The need for additional cover in the nascent DeFi space was underlined with an ironic twist last month, when Nexus founder Karp’s personal account was compromised in a targeted attack resulting in the loss of some $8 million in tokens.
Commenting on the attack, Karp said it was “quite scary” just how targeted it was.
“I think it puts the bar a lot higher for self-custody than I ever had in my mind before. That attack vector was very specific to me,” he said. “We’re still really early in the ecosystem, and we need to get to the point of having an FDIC-insured wallet equivalent in the decentralized world.”
