Nexus Mutual Newsletter | 8 December 2022
This newsletter is brought to you by the DAO Communications team. Stay up-to-date on the latest news and updates from the Nexus Mutual community.
Update on Nexus Mutual’s Exposure to M11 Credit’s wETH Lending Pool on Maple Finance
Earlier this week, I shared an update on Nexus Mutual’s exposure to M11 Credit’s wETH pool on Maple Finance. Nexus Mutual was notified by M11 Credit and Maple Finance of issues with specific loans in the M11 Credit wETH lending pool.
After the team was notified, the mutual initiated the 10-day waiting period to withdraw all available funds from the M11 Credit pool on Maple after being made aware of Orthogonal Trading’s default and the allegations that they misrepresented their financial position to M11 Credit.
The expected losses represent an estimated 1.5% to 2.6% of capital pool assets.
This does not impact Nexus Mutual’s day-to-day operations or the ability to pay claims.
Updates on Auros Loans
Auros experienced short-term liquidity issues that impacted their ability to make repayments. M11 Credit reviewed Auros’ latest financial statements and their path to recovery and provided Auros with a short-term extension. We are expecting a high recovery on the wETH loans made to Auros.
M11 Credit’s most recent update notes a potential positive resolution to Auros’ liquidity issues.
Updates on Orthogonal Trading Loans
Earlier this week, M11 Credit and Maple Finance shared updates, which alleged Orthogonal Trading misrepresented their financials. This violated Maple Finance’s agreement and breached M11 Credit’s Master Loan Agreement. Both M11 and Maple are evaluating options for legal recourse to recover funds.
Expected Impact
Based on what we know currently, Nexus Mutual should expect to take a loss of around 2,461 ETH on the Orthogonal Trading loans. This represents 1.6% of our assets. The Auros situation is more fluid, but losses are expected to be less than losses due to Orthogonal Trading’s default.
Governance and Next Steps
You can read about the governance process and the vote to allocate capital to an investment in the M11 Credit wETH pool on Maple Finance in the Nexus Financials section of the docs.
Members can comment and discuss on the appropriate next steps going forward, given that there is time to discuss on the Nexus Mutual forum.
Maple Finance will be hosting a community call on the Maple Discord on Friday (9 Dec). You can attend and listen to the latest updates from the Maple and M11 Credit teams.
Community Call on 6 December
Nexus Mutual Discord, Community Calls Voice Channel
On this week’s community call, I provided a detailed update on Nexus Mutual’s exposure to the M11 Credit wETH pool on Maple Finance. Afterwards, Hugh shared his weekly update from the Foundation, which is summarized below.
The engineering team has submitted the Nexus Mutual V2 code for the final audit. The code is now feature complete. BootNode has supported V2 development through code testing. Members can look for announcements related to V2’s launch timeline in the next few weeks.
Hugh also shared that the Tokenomics Working Group is progressing with their work finalizing their work on mechanism design alternatives. Soon, they will share their most recent findings with the member community.
The product team has been exploring a Directors and Officers (D&O) product that would be intended for DAO contributors. This product would provide legal liability protection. Currently, this product is being explored, as there has been significant demand for this cover product.
If you couldn’t join us on the call this week, you can listen to this week’s community call recording on the Nexus Mutual YouTube channel.
The Last Week in Review | 28 November – 4 December 2022
In the last week, the mutual sold $10.8m USD worth of cover and earned $34k USD in fees, as outlined below.
Active Cover as of 5 December 2022
Total active cover stands at $170m | 134,343.45 ETH with active coverage by cover type as follows.
You can review total active cover and active cover by cover product on the Nexus Tracker.
Up Next
Join us on Tuesday (20 Dec) for our next community call at 9am EST / 2pm UTC to stay up-to-date on all things Nexus Mutual.
Don’t forget to follow the Nexus Mutual Twitter account for regular updates and communication from the mutual. You can follow the Nexus Mutual Bot Twitter account to stay up to date on cover buys as they happen.
Have a great weekend everyone 🐢
Resources
Nexus Mutual is fully transparent. You can verify the information within this newsletter and learn more about the mutual through the resources below.
Nexus Mutual’s community is most active on Discord. You may reach our team with any questions through LinkedIn and Discord.