As we welcome autumn and bid farewell to another slow summer in a bear market, we're pleased to spotlight Nexus Mutual’s enduring partnerships that address risk protection needs often overlooked by traditional insurance.
The Retail Mutual (TRM) Cover Sales Growth: 71%+ Increase Over Three Months
Through our partnership with InShare, Nexus Mutual via the Unity Cover staking pool began underwriting fire, theft, and accidental damage for over 5,000 small independent business owners in the UK. Over the past three (3) months, InShare has consistently increased their TRM cover buys. This trend represents more than a 71% increase in cover sold and cover fees earned since InShare began passing risk on chain in late July.
We’re excited to see InShare increase their total covered amount and pass risk onto the Unity staking pool. The potential to build businesses on top of Nexus Mutual and expand into greater real world risk presents a massive opportunity to grow cover sales and break into traditional risk markets.
To learn more about our partnership with InShare, see the announcement we shared on the Nexus Mutual blog in August 2023. We're always eager to forge new long-term partnerships and tackle real-world challenges. Discretionary mutuals interested in offsetting risk and expanding capacity can reach out to the Nexus Mutual team.
The Latest on the Tokenomics Revamp
The Nexus Mutual community has completed the final phase of the parameter discussions for the tokenomics project. The most recent phase was focused on setting the oracle buffer and the initial price parameters: the DAO R&D Team shared their recommended approach to setting these two parameters and members didn’t provide any alternative parameter packages for the third and final discussion.
You can review the outcome of the three parameter discussions on the Nexus Mutual governance forum:
Liquidity Parameters Discussion (Part 1) | How much ETH liquidity do we start with?
Parameter Discussions (Part 3) | Oracle Buffer and Initial Prices
To learn more, you can also review the following excerpts from our our bi-weekly community calls for a recap of the phase two of the project with members’ discussions on liquidity parameters or this announcement for the first phase, where members were first invited to learn more about the RAMM.
The Need for the Tokenomics Revamp Project
When Nexus Mutual’s first launched in 2019, a bonding curve model was used to manage capital within the mutual. Using a bonding curve allowed people to join as members, contribute capital and mint NXM, and ensure that members could not redeem NXM when the amount of capital in the pool was less than the Minimum Capital Requirement (MCR).
The MCR plays an important role—this limit is used to make sure the mutual always has enough capital to pay claims. With the current bonding curve model, members can’t redeem their NXM for ETH when the amount of capital in the pool is less than the MCR Floor, which members set through a governance vote in October 2022.
In August 2022, the Tokenomics Working Group was created to research and implement a long-term sustainable replacement to the bonding curve mechanism and current MCR lock.
The Ratcheting AMM (RAMM)
The RAMM mechanism was proposed by the DAO R&D and the Foundation Engineering teams to replace the bonding curve mechanism.
The RAMM is designed to:
Allow members to redeem their NXM for ETH within the Nexus Mutual protocol
Allow members to contribute capital and mint NXM
Create positive value for long-term aligned members
Maintain the mutual’s ability to pay all potential claims
👉 To learn more, please review the RAMM Education Guide on the governance forum, as well as the RAMM Whitepaper and the Tokenomics V2 Technical Specifications document.
Implementation Timeline
Now that the parameters discussions within the Nexus Mutual community are complete, Chaos Labs are expected to also finalize their evaluation of the RAMM as well as the parameters until the end of this month. In addition, Iosiro will be auditing the smart contracts within this month.
The parameters outlined in the three discussions will now be reviewed by Chaos Labs, our economic audit partner for the RAMM codebase. After their review, some parameters—excluding the initial budget parameter—may be changed to ensure that the RAMM meets its goals and is secure against economic attacks.
Once the economic audit and Solidity audit are completed and any feedback is incorporated, the NMPIP for the RAMM will be subject to a full-member on-chain vote, which will be announced after the two audits are completed.
👀 Make sure to keep an eye out for upcoming updates to witness this groundbreaking change to the Nexus Mutual protocol!
Resources
You can find the September updates from the Nexus Mutual community below:
Nexus Mutual is fully transparent. You can verify the information within this newsletter and learn more about the mutual through the resources below:
Thanks for reading!
We look forward to seeing you at our next Community Call on the Nexus Mutual Discord on 17 October (Tuesday) at 1pm UTC!