How Hodlnaut Custody Cover holders can prepare for claims filing
On 8 August 2022 at 10:09am UTC, Hodlnaut announced that they were halting all withdrawals, token swaps and deposits effective immediately. Hodlnaut released a statement, which outlined the reasons for their decision to halt withdrawals:
If you held an active Hodlnaut Custody Cover on 8 August 2022 at 10:09am UTC, you will be able to file a claim starting on Monday, 7 November 2022 at 10:09am UTC.
Below is information about Custody Cover, the claims filing process, custodial proof of loss, and claims assessment.
Custody Cover
Custody Cover protects against a loss of funds for crypto assets that are held in a custodial account. Once Hodlnaut announced that they were halting withdrawals, the 90-day provision in Section 1.2 took effect — members who held active cover when withdrawals were first halted have to wait for 90 days to pass before claims can be filed.
You can read the full Custody Cover wording or review the Custody Cover section in the Nexus Mutual documentation.
Claims Filing
On 7 November 2022 at 10:09am UTC, the 90-day period will have passed and you can start the claims process. You can check the Hodlnaut Custody Covers List to see if your cover was active at the time withdrawals were halted.
If your Hodlnaut Custody Cover is one of those listed above as eligible for claims filing, then you’ll be able to file a claim on or after 7 November 2022.
Nexus Mutual requires proof of loss for Custody Cover claims. You’ll need to provide off-chain proof of loss. When you file your claim, you should attach a copy of your account statement, which you can download as a PDF file from Hodlnaut.
To download your PDF file, open your Hodlnaut app, login, and scroll down to the bottom of the page where you’ll see the Download Monthly Statements field. Select the most recent month and click Download PDF. You can then submit this document as proof of loss to show your current balance. Please redact any personal information in the PDF ahead of claims filing. Learn how to redact information in a PDF document with Adobe here.
You can also include other types of proof of loss, which can include emails from Hodlnaut regarding halted withdrawals, screenshots of withdrawal prevention messages, and other examples that demonstrate the amount of funds you’ve lost due to halted withdrawals.
When you are able to file your claim on Monday (7 November), you can head to the Nexus Mutual user interface and begin the process. If you have any issues, you can head to the Nexus Mutual Discord and share a message in the claims discussions channel.
If you’ve never filed a claim with Nexus Mutual before, you can read through the following section for an overview. And if you’re a member who would like to participate as a claims assessor, you can also read the Claims Assessment section.
What Prevents Claims Assessors from Denying My Claim?
The claims assessment process is designed like an optimistic oracle, but instead of code, humans act as the oracles. The system is designed so that any attack would put more capital at risk than any potential profit that could be gained or any capital staked in Risk Assessment that could be saved.
Read more about the advisory board’s role in the claims assessment process in the Nexus Mutual documentation.
You can also review the mutual’s claims history in the Nexus Mutual documentation and directly on-chain.
Claims Assessment
You can file a claim up to two times; 10% of your cover cost is reserved for filing claims, as outlined in the diagram below.
Once your claim is submitted, Claims Assessors then review and assess the validity of your submitted claim. Any member can act as a Claims Assessor by staking NXM to participate in the claims voting process.
To become a Claims Assessor for the first time, a member can stake any amount of NXM for the initial staking period. When voting on a claim, the stake period is extended by the staking extension period (7 days). This means a claims assessor’s NXM will be staked for a minimum of 7 days; however, a member can only participate in claims assessment after NXM has been staked.
Should the assessor vote with the consensus outcome, this extension period is removed; should they vote against the consensus outcome, it remains in force.
When submitted, a claim first goes to the claims assessor group for voting. When voting on a claim, a claims assessor’s entire stake is applied to that claim as the voting weight. This is used to determine the voting outcome as well as determine the proportionate share of fee pool rewards, or the rewards claims assessors receive for voting honestly with the consensus.
The voting period lasts for a minimum of 36 hours. After this point the vote automatically ends on the earliest of either when:
- Voting stakes of greater than 10x the cover amount have voted; or
- 72 hours have passed.
The stake weighted voting outcome then determines the claim result. A claim is escalated to a full member vote if either:
- Voting consensus is below 70%; or
- Voting weight is less than 5x the Cover Amount.
You can read more about the claims assessment process in the Nexus Mutual documentation.
Join the claims assessment discussion in the Nexus Mutual Discord.
Review claims in the Nexus Mutual user interface.
