Nexus Mutual — from earthquakes to the on-chain risk marketplace
Nexus Mutual started with an idea inspired by the impact of earthquakes in South America, where access to insurance for catastrophic risk is all but nonexistent for the average person. After witnessing the devastation caused by earthquakes in Peru, Hugh Karp wanted to find a way to bring insurance back to its roots–a cooperative, community-driven approach that allows anyone to share risk with anyone else.
In the first film of Chainlink’s Block Stories series, Hugh shared his story as an early founder who had a vision to work with others and reinvent the way we share risk on the blockchain.
Off-chain data feeds for on-chain risk sharing
Nexus Mutual uses high-quality, tamper-proof market data from Chainlink Price Feeds to help secure its multi-currency capital pool. On-chain access to globally precise market data helps the protocol maintain its minimum capital requirement (MCR) and accurately calculate quotes for new insurance coverage.
Chainlink’s decentralized oracle network has been a crucial component within the mutual’s infrastructure, which will only become more integral as the mutual expands into new markets and covers other kinds of risk.
Allowing members to share risk–from launch to today
Since the launch of Nexus in May 2019, more than 8,700 people have joined the mutual to share risk with their fellow members, underwrite coverage, buy cover to protect their productive assets, assess claims, and participate in governance. The capital pool has grown to 153,405 ETH, or $188,893,381 when accounting for today’s ETH price. Over the years, members have expanded cover offerings to include Protocol Cover, Custody Cover, and Yield Token Cover, all of which protect against various cryptonative risks.
To date, members of the mutual have paid out 1546.43 ETH + 5,462,759 DAI–more than $7.1m– to cover holders who suffered a loss due to past exploits.
Nexus V2–an on-chain risk marketplace
The newest iteration of the Nexus Mutual protocol is being finalized and will offer members a more efficient way to share risk. Nexus V2 transforms the mutual into an on-chain risk marketplace that gives members greater freedom to access flexible cover policies, manage risk by launching and running a syndicate, integrate with the mutual to offer cover to your users at the point of deposit, and more.
This new model will allow syndicates to launch new cover products, for both cryptonative and real world risk. The on-chain risk marketplace will match risk and pricing expertise and allow more people to share risk with one other.
As members expand the risks covered within this marketplace, the demand for timely and accurate off-chain data feeds will grow. Chainlink will continue to be an important partner when Nexus V2 launches.
By giving members the freedom to build on top of the mutual, a diverse number of risks can be covered as the marketplace grows. Hugh’s early vision of making coverage more inclusive to protect those in Peru and others elsewhere against real world risk will be realized.
Nexus Mutual is a decentralized insurance alternative built on the Ethereum blockchain. The mutual was created to give people a way to hedge against the unique risks in on-chain markets.
Learn more at nexusmutual.io
Chainlink enables smart contracts on any blockchain to leverage extensive off-chain resources, such as tamper-proof price data, verifiable randomness, keeper functions, external APIs, and much more.
Learn more at chain.link