Nexus Mutual Newsletter | 4 April 2022
I hope all of our Nexus Mutants had a wonderful weekend! To start your week off right, we have all the Nexus updates we can fit in one weekly newsletter.
Snapshot Vote: Immunefi Matching Bug Bounty Proposal
On Friday, I transitioned the Immunefi Matching Bug Bounty Proposal to a Snapshot vote.
The proposal is seeking a renewal of the matching bug bounty program with an increase of funding from $200,000 to $600,000, as well as modifying the requirements and terms as follows:
Projects with an active bug bounty program on Immunefi.
Provide matching for bug bounties with a critical threat level rating.
Cap maximum total payouts at $600k but allow matching up to $600k for projects with greater than $8m in active cover; for projects with active cover between $2m and $8m, the matching bounty will be capped at $200k per bounty payout.
Matching ratio will adjust from $1 in matching for every $1 offered as a critical bug bounty (1:1) to $0.50 in matching for every $1 offered as a critical bug bounty (0.5:1)–this ratio change would create a greater incentive for projects to increase the size of their critical bounty payouts, so long as there is demand for cover on Nexus Mutual.
Matching bug bounty payouts deliver cost effective value to members when the matching payout is less than potential claim payouts on a certain percentage of a project’s active cover amount.
Not all loss events lead to a 100% claim rate. While data on past claim events is thin, members can assume a matching bug bounty is most cost effective when estimated as a percentage of 10% to 40% of the active cover amount for a project.
Proposed matching terms are as follows:
Cap maximum payouts at $200k (or the remaining funding) for projects with active coverage in the $2m to $8m range; and
Cap maximum payouts at $600k (or the remaining funding) for projects with greater than $8m in active coverage
This proposal started as the Immunefi Matching Bug Bounty Program Review | Request for Comment (RFC) post, which was then used to create the formal proposal.
This proposal opened for voting on Friday, 1 April 2022, at 11am EST / 3pm UTC and voting will close on Friday, 8 April 2022, at 11am EST / 3pm UTC.
Please review, decide, and vote!
Nexus V2 Review: the Nexus V2 Ecosystem, Redefining On-Chain Coverage
In our latest Mutant Meetup call, I built upon all of the content we have reviewed over the previous three weeks and provided more insight as to how Nexus V2 benefits the different audiences participating within the mutual.
Cover Buyers. In V2, more power is put back in the hands of members. As more cover is sold and the capital pool grows, the mutual will be able to underwrite more cover and protect a greater percentage of DeFi and CeFi users. Members who buy cover benefit from the following features:
Editable policies that allow members to increase/decrease cover duration and total covered amount
Partial claims enabled, which will phase out the 20% loss requirement for Protocol Cover
Ability to resell policies on secondary market
Cover buys can be automated using smart contracts
Risk Assessors. Members can delegate their NXM to risk experts and earn passive yield. Delegated staking socializes gas costs and reduces barriers to participation. Syndicates can share their staking methodology and views on risk to create greater transparency and build trust with the Nexus Mutant community. Members acting as Risk Assessors benefit from the following features:
Members can review staking methodology, determine the best risk vs. reward when delegating
Syndicates will display an APY, giving members a better indication of the passive return when delegating NXM
Time-based veModel for NXM will allow members who delegate NXM for longer periods of time to earn more premiums
Syndicates can create tokens that represent delegated NXM positions, which would allow members to trade out of delegated NXM positions
Syndicate Operators. Members who already have risk expertise can turn their knowledge into additional revenue and earn management fees and potentially commissions on cover buys, if they sell cover directly to users. Syndicate operators have the freedom to create and run their syndicate in a permissionless way, while offering greater value to the Nexus ecosystem. Members acting as syndicate operators benefit from the following features:
Determine staking allocation, weight to create available cover capacity
Set cover pricing, earn management fees when cover is purchased from the syndicate
Create, offer new cover products not currently available within the mutual
Tap into the mutual’s infruastructure, deep cover capacity—no need to bootstrap significant amounts of capital
Individual Brokers. Enterprising members can partner with syndicates and use referral links to sell cover and earn commissions on cover sales that originate through their referral link. The more cover sold through one syndicate, the greater the management fees and premiums earned within that syndicate. Mutually beneficial relationships between syndicate operators and individual brokers will emerge because economic incentives are aligned. Members acting as individual brokers benefit from the following features:
Members who act as brokers earn commission in the current members are using to pay premiums (i.e., ETH, DAI, NXM).
Work with syndicates to expand distribution through marketing and strategic partnerships
Considerable incentives to onboard institutions and funds to earn massive commissions when cover is purchased.
Nexus V2 will create the first on-chain market for risk within DeFi. The mutual’s on-chain market for risk will be powered by competition between syndicates and coordination among members of the mutual to significantly expand access to Nexus Mutual’s cover products within DeFi and CeFi. The added features and expansion of the distribution/sales network will allow the mutual to adapt to new risks as the market changes.
For an overview of the last four weeks, members can review the Nexus V2 | Overview slides, or members can review the Mutant Meetup recordings from the Month of March in the archive.
The latest Mutant Meetup recording from Tuesday, 29 March 2022, can be found here.
Interested in learning more about syndicates?
Are you a member with risk expertise that would like to learn more about the different types of syndicates?
If so, you can fill out the Nexus V2 Syndicates Google Form and I (BraveNewDeFi) will be in touch!
Upcoming Conferences
Below is a summary of the conferences the Nexus team will be present at during the month of April.
Decentralized Insurance Conference (D1Conf) | 21 April
Nexus Mutual is co-hosting the 4th annual D1Conf with the Etherisc team! This event will focus on the advancements being made in blockchain insurance markets, economic/distribution models, and the evolving regulatory landscape.
The speaker list will be finalized within the next week, so keep an eye on the Nexus Mutual Twitter account.
Secureum TrustX Security Conference | 21-22 April
Hugh Karp will be speaking during the the TrustX security conference during Devconnect.
The mutual is always closely watching as new risks emerge in DeFi, and Hugh will talk about the advancements in the on-chain tech stack and evolving risks in DeFi at the first ever TrustX security event.
PlannerDAO Crossroads Conference | 25-26 April
Nexus Mutual is the title sponsor of this year’s PlannerDAO Crossroads conference! I will be representing the mutual at Crossroads and presenting on Monday, 25 April. I’ll be talking about the challenge of onboarding into DeFi, how to identify on-chain risk, and how the mutual helps members maximize yield, while minimizing exposure to risk.
Hugh will present remotely on Tuesday, 26 April, and discuss the everchanging nature of on-chain markets, the evolution of risk, and the future of decentralized risk managment.
New Listings + Risk Assessment Opportunities
The above protocols have been listed in the Nexus Mutual dApp, and members can now purchase Protocol Cover policies to protect their productive assets deposited into any of the following protocols.
If you have a deposit in FODL, Alchemix V2, Platypus, and/or Beefy, you can cover your assets to minimize your exposure to risk and maximize your yield!
For members who want to review the above protocols and act as Risk Assessors to add additional capacity and earn a share of cover premiums, the risk-related resources are included in the Nexus Discord.
Review of Cover Sales
Call for Tokenomics Working Group
The disparity between wNXM and NXM has not gone unnoticed within the Nexus Mutual community. It’s been a point of frustration for many, but our community is filled with smart, skilled contributors who have formed a working group to discuss potential changes to NXM tokenomics or modifications to the bonding curve design. This conversation started on the Nexus Mutual forum.
While the core team is focused on shipping Nexus V2, which will significantly improve the protocol and widen our distribution network, our community is hard at work on addressing the wNXM issue. When our community works together, we can accomplish anything.
If you are interested in joining the tokenomics working group, reach out to Jack (Dopeee).
Weekly Close
This next week, we’ll be hosting:
Our Mutant Meetup call on Tuesday (5 April) at 10am EST / 2pm UTC on Discord in the Community Calls Voice channel.
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 🐢