Nexus Mutual
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Nexus Mutual

Nexus is growing: Protocol Cover is live!

In response to the ever evolving demands of the DeFi ecosystem, our users have been calling for more versatile protection against the inherent risks in DeFi. Today we’re excited to launch Protocol Cover to answer these demands.

Following a member vote last month, in addition to protection against smart contract hacks, members with cover are now also protected against:

  • oracle attacks

Introducing Protocol Cover

Protocol Cover is more broad and flexible because it covers everything from Smart Contract Cover plus events related to oracle attacks, severe economic attacks and governance attacks.

It also provides coverage for protocols running on any chain as well as specifically including layer 2 components.

Protocol Cover is the answer to the ever expanding and developing DeFi ecosystem as members with funds on non-Ethereum chains now have the ability to get covered for the first time. With upcoming layer two developments members’ cover is also future proofed as layer two components are covered in the same product. This move towards providing the most comprehensive and broad coverage of the DeFi space enables Nexus Mutual members to interact with an inherently risky ecosystem with peace of mind that their funds are fully protected across multiple chains, layer two components and severe economic, oracle and governance attacks.

Hugh, our Founder said:

“Risks in DeFi are constantly evolving and Nexus products need to provide protection for our members in this fast moving world. Not only have we expanded coverage to be more comprehensive we’re also looking to protect new solutions before they come to market, whether that’s as part of a multi-chain world or as part of Layer Two scaling solutions.”

Newly available protection — the first of its kind.

Thanks to the more flexible coverage available, we are pleased to highlight some new additions to the protocols that can be covered with Nexus:

  • Thorchain
Newly listed protocols require members to stake NXM to enable cover availability

What is covered exactly?

In addition to unintended use of code, members are now also covered in the event of flash loan oracle manipulations, Ethereum ecosystem and other chains including BSC and layer two components. So, if you have funds in a project and there is an incident that results in your digital assets being lost or stolen you will be covered with Protocol Cover. Unfortunately it is too difficult to calculate the risks around, and pricing of rug pulls so they are not covered. Read the full terms in the Protocol Cover wording document here.

When you deposit funds in Project A, you will be covered if there are incidents with that protocol on the smart contracts they own. If Project A is interrelated with Project B, you would also need cover on Project B if you want to secure your funds in the event that Project B suffers an incident or hack.

What this means for users

Simplified claims process and more simple to understand what is covered.

Our community discusses each claim in great detail when an incident occurs. Our cover wording document is designed to be a high level guide, but not a rigid determination of what is and isn’t covered. This is for two reasons:

  • Most incidents are edge cases with nuance and require interpretation by the Claims Assessors (members who stake NXM to vote on a claim)

Now, with Protocol Cover, there are broader terms of coverage which means that Claims Assessors will have a clearer understanding from which to cast their vote and members with cover will have a better understanding of what is covered.

How this grows the mutual

We’re offering our members a better, more comprehensive product. We’re aware there is increasing demand for this kind of cover — the first of its kind. By opening up cover to include other chains and layer two solutions, we’re granting access to protection for many more users. Users of these protocols can now get Nexus cover to protect their digital assets and their yield opportunities across the entire ecosystem.

How cover works

Nexus Mutual has been protecting members for nearly two years with Smart Contract Cover; the legacy product that has now become Protocol Cover. Members share risk together with some taking the role of a Risk Assessor which means staking NXM (Nexus’ native token) to enable cover purchases by other members. Risk Assessors get rewards for doing so but can be burned in the event of a successful claim. This, in turn, enables other members to purchase cover on a protocol.

The future of Nexus

Winning submission from Vitamin C (@gunawanlatef) to create a meme for our launch. 5x winners receive 2 NXM each.

We’re excited for Protocol Cover to be launched and available for our› members — but we’ve not stopped building. Here are some of the things we’re working on:

Yield Token Cover

  • Swap a yield bearing token such as yDAI for the underlying currency eg DAI. To cover all risk of the token de-pegging regardless of which underlying protocol failed, or the reason for failure.

Investment earnings

  • We’ve made some upgrades to enable this feature of the mutual to be put to use. Traditional insurance companies invest their pool of funds to earn yield on otherwise dormant pools. We’re going to do the same to maximise the value of our pool — which all members co-own.

For detailed, technical discussions and community fund proposals use our forum.

Join our community on Discord.

For Telegram updates join the announcements channel and discussion group.

For all stats and data visit the Nexus tracker built by Richard Chen.

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Kayleigh Petrie

Kayleigh Petrie

Attempting to navigate real life. Director of Engagement at Nexus Mutual.