Our members can now protect themselves against smart contract failure including the key DeFi smart contracts like MakerDAO, Compound, Dharma and Uniswap. This is the first of its kind and will protect users from losing their funds due to bugs while also allowing developers to deploy contracts with greater confidence.
The first member to purchase Smart Contract Cover bought 1,000 DAI worth of cover on Nuo at a cost 6.41 DAI for 90 days.
Anyone can become a member and protect themselves against smart contracts. The cover is flexible — you chose the cover amount and cover period. You can protect against any smart contract that has been verified on Etherscan. Sign up to be a member here.
One of the challenges Ethereum faces is the ability to trust smart contracts. Since mid-2016 there have been three high profile hacks of Ethereum smart contracts as well as many smaller ones. These all involved large volumes of funds being lost against the intention of the code. Blockchain gives us confidence that smart contracts will operate as coded but regular users can’t always be confident they will operate as intended. The Ethereum community will benefit from another safety net.
To address this need we have developed Smart Contract Cover, a product that is designed to pay-out claims if there is ‘unintended code usage that results in a material financial loss’. Members of our mutual share risk with each other by pooling their funds together and deciding as a group which claims are valid. The mutual is fully run and controlled by its members with any surplus from cover purchases being owned by the members.
Nexus Mutual is operating as a fully digital discretionary mutual. There is an advisory board — but they can be voted out by members at any time and have no custodial rights on the pool of funds. Nexus Mutual is linked to a legal entity in the UK which means full compliance with all regulations. This decision was made in order to stand the best chance of disrupting the age-old insurance industry in a meaningful way.
Although Nexus Mutual launched in May, covers would only go live once we raised the minimum capital requirement of 12,000 ETH. Members voted to reduce this requirement to 7,000 ETH in a series of proposals through our governance system. Members voted overwhelmingly to upgrade the parameters of the capital requirement which means cover purchase is now live as the mutual has over 7,000 ETH in the pool — this pool is wholly owned by our members.