About Nexus Mutual Coin

Nexus Mutual price today is $55.39 with a 24-hour trading volume of $1,170,623. NXM price is up 5.2% in the last 24 hours. It has a circulating supply of 6.7 Million NXM coins and a max supply of 6.72 Million. Nexus Mutual is the current most active market trading it.

 

What is NXM?

NXM is the governance token for the Nexus Mutual protocol. It is used to buy cover, vote on governance decisions, and participate in Risk and Claims Assessments. It is also used to encourage capital provision and represents ownership to the mutual’s capital. As the mutual’s capital pool increases, the value of NXM will increase as well. 

The token’s price is determined using a bonding curve which is affected by both the amount of capital the mutual has and the amount of capital it needs to meet all claims with a certain probability. 

nxm price bonding curve

The NXM token is not traded on any exchange and is only used as an internal token for Nexus Mutual. To obtain the NXM token, one must register as a member of Nexus Mutual and go through the platform’s KYC and AML processes. 

A one-time membership fee of 0.002 ETH will also be charged. Once approved though, members can then obtain coverage and enjoy all the benefits that the NXM token provides. 

There is a “wrapped” version of the NXM token called Wrapped NXM (wNXM) that is freely transferable and can be bought on the open market through cryptocurrency exchanges. However, to make use of the wNXM token, it first needs to be unwrapped into NXM by a registered member of Nexus Mutual. After it is unwrapped, wNXM becomes NXM and can be used as usual on the platform.

 

What is Nexus Mutual?

nexus mutual crypto insurance

Nexus Mutual is a decentralized insurance protocol built on Ethereum that currently offers cover for smart contracts on the Ethereum blockchain, currently covering all the main defi protocols. Nexus Mutual offers coverage against smart contract failures, which protects against potential bugs in smart contract code. 

The coverage intends to provide protection against financial losses that may be incurred due to hacks or exploits in the smart contract code. Note that smart contract cover only protects against “unintended uses” of smart contracts, so security events such as the loss of private keys or centralized exchange hacks are not covered. In December 2020, it released custody cover covering centralised custodians and lenders such as Celsius, Blockfi, and Nexo

 

How to check the financial health status of the Nexus Mutual protocol?

Relevant on-chain financial metrics can be found on https://nexustracker.io/

 

How is the coverage priced?

The price of cover is based on several criterias such as:

  1. Cover Amount

  2. Cover Period

  3. Amount of NXM tokens staked against the smart contract

 

How is risk assessment done on Nexus Mutual?

NXM holders can stake on various smart contract protocols to receive 50% of the premium sold. The programme allows up to 10x leverage, meaning with 100 NXM, the total amount of staking can go up to 1,000 NXM. 

For example, if a staker has 100 NXM and stakes 100 NXM each on 10 protocols, he will receive 50% of the premium received from the 10 protocols. However, the staker risks losing the whole 100 NXM even if only one of the 10 protocols has a valid claim. 

A project can incentivize staking by participating in a shield mining programme, by rewarding the project’s native token on top of NXM staking rewards in order to drive down the premium price. Premium price for a particular protocol will go down as more NXM tokens are staked against it. 

 

How to purchase cover?

  1. Users must first submit an application to become a member of Nexus Mutual.

  2. Specify which smart contract address users want cover for.

  3. Specify the Cover Amount, currency (ETH or DAI), and Cover Period.

  4. Generate a quote and process the transaction using an Ethereum wallet such as Metamask.

  5. You are now covered!

 

How to claim?

Members must stake a deposit in the form of NXM tokens which comes from the 10% of NXM tokens that were locked when purchasing cover. The required deposit is 5% of NXM tokens, which means a member can submit a claim for assessment twice. If the claim is accepted the deposit is returned, otherwise it is burned.

 

Has NXM ever paid out claims before?

Yes! In the case of the bZx flash loan event in February 2020, there were 6 members who had cover on the smart contract for a total cover of roughly $87,000. Three claims submitted by these members were accepted for an overall payout of $34,996, disbursed immediately after Risk Assessors voted to accept their claims.

 

Can I buy the cover without KYC? 

Nexus Mutual’s partnership with Yearn Finance has provided a path for non-mutual members to buy cover without KYC. The project is spinned off into Armor.

 

Notable Events

  • On 21 December 2020, the founder of Nexus Mutual, Hugh Karp was hacked for 370,000 NXM. 

 

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