Interview with Nexus Network: Securing Yields for Idle Bridge Assets
Nexus Network makes it possible for EVM chains, Rollups and RaaS providers to implement secure, non custodial yield mechanics. Nexus Network is revolutionizing the economic backbone of blockchain rollups, enhancing efficiency and security in the process. With rollups streamlining transactions into a single block before reaching the mainchain, Nexus Network steps in to unlock the potential of idle assets on Rollup bridge contracts on Ethereum; currently valued at $15 billion and projected to soar to $150 billion within three years.
They have raised a $1M Pre-seed fund and coinIX is one of the investors. Other investors of Nexus Network are Hashed Emergent, Founderheads, Breakorbit and Mask Network. Mahsa Doorfard, coinIX’s Sales and Marketing Manager has interviewed Mayank Raj, the Co-founder and CEO of Nexus Network. This article presents his insights.
Mahsa: ‘Would you please introduce yourself and tell us how did you end up in the blockchain industry? what is your story?’
Mayank: ‘I did my Bachelor of Technology at IIT Bombay, which is the best engineering college in India. After that, I completed my MBA and worked as a consultant at KPMG, where I consulted across multiple sectors. During that time, a friend shared an article with me about Wall Street Bets and Cryptobets, the whole Gamestop saga that was going on in early 2021. I had read the Ethereum and Bitcoin white papers long ago, but I had never delved deeply into them. This article reignited my excitement about crypto.
For the next three or four months, I spent my evenings researching the crypto industry while continuing my day job. I tried out various protocols, including Uniswap and Aave, which fueled my excitement about the industry. During this period of research and investment, I decided to transition to working in crypto full-time. I reached out to Rohit, who coincidentally is now my co-founder. He was already working as a developer in the blockchain industry. I ended up joining the same firm where he was employed. The two of us worked together there, and eventually, we founded Nexus Network. It’s been an exciting journey over the past three years.’
Mahsa: Your team has a great background and reputation, which will likely empower the project and attract more people. The concept of roll-ups and securing yields for idle assets might be a bit abstract and complex for everyone to grasp. If your grandmother were to ask you, “Hey Mayank, what is your project about?” how would you explain it to her?’
Mayank: ‘The way I would explain it to my grandma is by drawing a parallel with something familiar: banking! think about how we deposit money in banks. The banks then use our money to lend to businesses and earn interest. They give us a part of this interest, say 1% or 2%, as a return on our savings. This is a safe way for us to earn a little extra money from the funds we keep in the bank.
Now, in the world of cryptocurrency, there are similar opportunities to earn returns, but the process can be more complex. Imagine that people move their crypto assets between different platforms, like moving money between different banks. Sometimes, these assets just sit there without earning any returns. Our project is like a bank for these crypto assets.
We work with various platforms, known as roll-ups or EVM chains, where these crypto assets are locked. We help generate returns on these assets by staking them on Ethereum, similar to how banks lend money to businesses. In essence, we’re providing a service to these crypto blockchains to help them generate returns, just like banks do for their depositors. In simple terms, our project ensures that people can earn secure returns on their idle crypto assets, just like earning interest from a savings account in a bank.’
Mahsa: ‘When was the first moment that the idea of Nexus Network came into your mind? why?’
Mayank: ‘Rohit and I were working together at our previous company on a product related to liquid staking, focusing on generating yields for every customer staking ETH. You might have heard of Lido or Rocket Pool; we aimed to build a similar product but with a focus on the roll-up ecosystem. Early last year, we noticed a lot of new roll-ups emerging, and we realized that this market was only going to grow.
During our research, we had an “aha” moment when we discovered that a significant amount of ETH was locked in roll-up bridges, with nobody paying attention to it. When we checked, we found that about 1% of the entire Ethereum supply, worth billions, was locked in these bridges. We expected this amount to grow quickly, which it did — over the past year, it has increased more than 3.5 times, reaching to 3.5–4% of the total supply, much of which is not earning any returns.
We saw that no one else was building a B2B solution to address this issue, and that’s how the Nexus Network got started. Now, we have the product ready and are really excited to bring it to the market.’
Mahsa: ‘What problem is Nexus Network solving?’
Mayank: ‘There are two major problems we’re solving: capital inefficiency and security.
First, let’s talk about capital inefficiency. Assets locked in roll-ups are not earning any returns, which means they are capital inefficient. By staking the ETH locked in these bridges, we can generate returns of around 3% to 4%. For example, if a roll-up has 100 million in ETH locked, it could earn an additional 3 to 4 million in returns. These returns can be used to incentivize users on the platform and support various protocols building on the roll-up. This additional cash flow helps the roll-up differentiate itself in the market and supports its growth.
The second aspect is security. Some roll-ups have started exploring staking solutions, but security is a major concern. We’ve built a highly secure product by leveraging the latest in staking technology. We’ve partnered with SSV Network, a DVT (Distributed Validator Technology) provider, to enhance security in staking. Additionally, we’ve incorporated insurance by partnering with leading insurance providers in the market. This combination ensures that our product is secure and reliable for roll-ups to use right out of the gate.
In summary, at Nexus Network, we’re focused on bringing capital efficiency to the market in the most secure way possible.’
Mahsa: ‘Implementing secure non-custodial yield mechanics for EVM chains, roll-ups, or roll-up-as-a-service providers is crucial for creating a safe environment where users can increase their earnings. Last week, you made a fundraising announcement. Would you like to provide more information about that and share any other updates or advancements?’
Mayank: ‘We are really excited about the fundraising announcement. We raised $1 million, with Hashed Emergent leading the round. We’re thrilled to have many partners on board, including coinIX, Mask Network, Founderheads, Breakorbit, and several angels. We have nearly ten angels who have invested in various amounts, and we are excited about the support from these individuals across the ecosystem. This includes people from the roll-up ecosystem and the ones building on the infrastructure side.
As for what’s coming next, we will be launching our testnet early next week. This testnet will allow people to visualize what the Nexus Network looks like. It will take our concept from idea to reality, enabling users to see how the entire yield flow operates. For example, as a user, you can transfer your assets into a roll-up and see how Nexus Network generates returns. You will be able to visualize the amount of money coming in, the returns generated, and how these returns can be directed.
The testnet is targeted at both our B2B customers and any user who wants to check it out. We are really excited about this launch, so stay tuned for next week!’
Mahsa: Congratulations on the $1 million raise, and we’re really looking forward to the testnet launch. You mentioned that there are no competitors for Nexus Network, but does that mean there’s literally no one else in the blockchain market doing the same thing you’re doing?’
Mayank: ‘If we define our goals and ideals specifically, there’s no one else in the market doing exactly what we are doing at Nexus Network. However, if we broaden the scope to include players focusing on staking ETH or providing liquid staking solutions, they could be considered competitors in a general sense. These players operate in the broader staking market.
Our specific niche lies in working with roll-ups and EVM chains as a B2B provider, which is a unique position currently unoccupied by any other entity. In the broader market, we differentiate ourselves in several key ways:
Firstly, our non-custodial design ensures that user assets never pass through Nexus Network, maintaining a high level of security. This sets us apart from competitors.
Secondly, our staking technology and the slashing insurance we offer further enhance security, a comprehensive approach not commonly seen in the roll-up ecosystem.
Lastly, we offer a complete suite of products, supporting both ETH and stablecoins like DAI, providing flexibility for roll-ups to earn returns based on their preferences and risk assessments. This comprehensive offering simplifies the process for roll-ups, distinguishing us from other staking providers.
In summary, while there are general competitors in the staking market, our focus on roll-ups, non-custodial security, advanced staking technology, slashing insurance, and comprehensive product suite make us uniquely positioned in the market.’
Mahsa: Nexus Network really stands out and that’s why we’ve invested in your project. we believe in your team. Is there anything else you’d like to share about Nexus Network?’
Mayank: ‘The most exciting development coming up is the testnet launch itself because, while we’ve discussed the idea, people will finally be able to visualize how things will function. We’re incredibly excited about this milestone. The testnet will go live next week, and we’ll announce it on our Twitter and Discord channels. I urge everyone listening to check out our social media platforms and, once the testnet launches, to try it out and provide feedback. Since it’s a test network, we’re eager to maximize participation and gather as much feedback as possible from our early supporters.
In crypto, early supporters often reap the greatest rewards, reflecting the ethos of the system. We want these early backers to join us, collaborate as we grow and improve.
Regarding partnerships, many exciting collaborations are on the horizon, which we’ll announce in the coming weeks. These are B2B partnerships, and while I can’t disclose specifics yet, stay tuned for updates.
Lastly, concerning roll-ups, if you’re considering building or already developing a roll-up, we’re enthusiastic about working with you to enhance yield generation. If you’re exploring ideas around roll-ups, we’re keen to discuss potential collaborations and see how we can work together.’
Mahsa: ‘What is your message to the people who have not invested in the blockchain industry yet?’
Mayank: ‘A few years ago, I was in a similar position where I didn’t know much about the industry and wasn’t sure where to begin. What I’ve come to realize is that there are many knowledgeable people out there who can offer guidance. Nowadays, no matter where you are in the world, you’re likely to find someone in your network who is actively involved in crypto investing. Connecting with these individuals can be incredibly beneficial.
What continues to excite me about this industry is the constant stream of new developments. There’s something for everyone, whether you’re a tech enthusiast or someone who enjoys taking risks. It’s an opportunity for everyone to explore and determine if it aligns with their interests.
I believe many people are passionate about crypto, while others may have reservations, and that’s perfectly okay. My suggestion is for everyone to give it a try and see if it resonates with them. It’s a great way to get started in the industry.
Additionally, I’ve found that coinIX has a really good user experience (UX), which I’ve explored and appreciate. Checking out platforms like coinIX can be a positive first step in understanding more about crypto.’
Watch the Interview on coinIX YouTube Channel:
Check out coinIX’s announcement about Investment in Nexus Network:
About coinIX Capital GmbH
Since 2017, coinIX Capital GmbH, headquartered in Hamburg, has been at the forefront of analyzing blockchain projects and cryptocurrencies, facilitating investments in this dynamic sector. Comprising specialists with extensive experience in asset management, venture capital, and cutting-edge technology analysis, the coinIX team manages a portfolio boasting over 20 investments in blockchain startups alongside crypto assets. Shares of coinIX GmbH & Co. KGaA are listed on the free market of the Düsseldorf Stock Exchange and are also traded on the Berlin and Munich stock exchanges.
About coinIX COINVEST SCI1
Launched in June 2022, coinIX COINVEST SCI1 is an open domestic special AIF under the KAGB. As a sub-portfolio of coinIX COINVEST Investment Stock Corporation with variable capital, its assets are managed by coinIX Capital GmbH, acting as a registered capital management company. Available for subscription by professional or semi-professional investors, the fund has the flexibility to invest up to 100% of its capital in crypto assets, aiming for a diversified portfolio of digital assets actively managed through ongoing selection processes. Additional income streams are generated through staking and other blockchain-native mechanisms. With the ISIN DE000A408Q55, subscriptions to the fund are only available directly through the investment company, with private investor acquisition prohibited.
