Nexus Mutual Newsletter | 21 January 2022
We hope all of our Nexus Mutants had a great week. This has been a busy week for the mutual, so let’s bring you up to date on all things Nexus Mutual.
Events
This week, we hosted several events, while BraveNewDeFi joined the PoolTogether community for their weekly podcast, PoolTogether Live.
Mutant Meetup Call (18 Jan)
During this week’s Mutant Meetup call, we provided the following updates:
Hugh spoke about Nexus V2, which will turn the mutual into an on-chain market for risk powered by our syndicate network. Hugh also provided an overview of the proposed execution plan for Operation Wartortle.
BraveNewDeFi shared an update on the work happening within Mutant Marketing. The Hub is preparing their operations report for the last quarter, as well as a proposal outlining the new objective, supporting key results, and budget for Q1+Q2 2022.
We also provided an overview of the relationship between the price of ETH and available capacity. Within this week’s recording, we have an explanation on how the Specific Risk Limit and Global Capacity Limit play a role in determining capacity available for purchase.
Members who couldn’t make it to this week’s Mutant Meetup call can review the recording here.
PoolTogether Live (19 Jan)
The PoolTogether community hosted BraveNewDeFi on the 5th PoolTogether Live podcast. BraveNewDeFi was interviewed by Tim and shared information about the what, why, and how of Nexus Mutual, while dispelling some of the common misconceptions about Nexus. It was a great conversation, and episode of PoolTogether Live will be published in the PoolTogether Community Substack next week.
Connecting with our listed protocol communities is one of the best ways to strengthen connections between Nexus Mutual and those protocols listed in the mutual’s dApp. We look forward to sharing information about the mutual with other communities. If you’re a part of a community that is interested in doing an AMA with Nexus Mutual, reach out to BraveNewDeFi on Discord (BraveNewDeFi#0027) or Twitter (@BraveDeFi).
Operation Wartortle AMA (20 Jan)
We hosted our second Discord Stages AMA to give members the opportunity to ask questions and discuss the Operation Wartortle Next Steps: Draft Execution Proposal posted on the forum.
Hugh provided an overview of the proposal and answered questions from the community. We’re reserving time on our Mutant Meetup calls to discuss the proposed next phase of Operation Wartortle, and we’ll be hosting one more AMA on Thursday (27 Jan).
If you review the proposal and have questions, just us this coming Thursday on Discord Stages.
Twitter Spaces Event with Tyler Ward of BarnBridge (21 Jan)
The mutual hosted another instalment in our Risk in DeFi Series with Tyler Ward. Hugh and Tyler discussed the existing barriers to entry for TradFi participants and institutions who want to get involved in DeFi but require more clarity, risk management solutions. Both spoke about the catalyst required for more institutions to come on chain and how BarnBridge and Nexus Mutual are working to make DeFi more accessible by providing risk management solutions.
Members who missed this Twitter Spaces event can still listen to the recording on Twitter.
Cover Buys (10–16 January)
We’ve included the DAI-denominated percentage and ETH-denominated percentage statistic, as BraveNewDeFi noticed that users bought more ETH covers when the market sentiment was bullish and more DAI covers when the market sentiment was turning bearish. BraveNewDeFi will include this in the weekly cover report because it’s an interesting statistic to track.
Conversations about Risk Management in DeFi
In the last month, there have been numerous conversations about the barriers to entry for traditional market participants looking to take advantage of DeFi yields. Many of the concerns come back to the topic of security.
Adam Cochran summarized the findings in the Nickel Digital Asset Management’s poll of institutional investors on Twitter, where he indicated the poll findings highlighted “Security” and “Custody” as the two largest blockers.
Moody’s Analytics and Gauntlet published Block by Block: Assessing Risk in Decentralized Finance, a proposed framework for assessing risk in decentralized markets running on-chain. The idiosyncratic risks highlighted in this article were:
Security Contract Risk
Governance Risk
Oracle Risk
Cooperative Risk
All of these risk factors are covered by a Protocol Cover policy, which provides protection for all of these major risks.
TradFi participants are starting to understand the benefits of using blockchain technology to reduce friction within existing markets. The Actuary published an article titled Blockchain to generate $10bn in savings for insurers by 2024 on 19 January.
As this conversation among market participants develops and more institutions realize the potential efficiencies blockchain technology provides, more users and TradFi participants will look for solutions that the mutual has already created.
With Nexus V2 growing closer every day, Nexus Mutants have a lot to look forward to in 2022.
Trend of 7-Figure, 8-Figure Covers
In the last week, the mutual has seen numerous multi-million dollar cover buys. In the last several months, the average cover buy has grown from $555,244.81 to $1,119,947.08, using the historical average of cover buy size. This represents a growth of 101.70%! The average premium earned has grown from $3,378.08 to $6,321.51, a 87.13% increase when using the historical average of premiums earned.
Weekly Close
In this next week, we’ll be hosting:
Our Mutant Meetup call on Tuesday (25 January) at 10am EST / 3pm UTC on Discord in the Community Calls Voice channel.
Our final Operation Wartortle AMA on Thursday (27 Jan) at 10am EST / 3pm UTC on Discord Stages.
You can follow the Nexus Mutual Twitter account for regular updates and communication from the mutual, and you can follow the Nexus Mutual Bot Twitter account to stay up to date on cover buys as they happen.
Have a great weekend and week ahead 🐢