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– TIMESTAMPS –
0:00 Intro
2:03 What is Nexus Mutual?
4:22 Why it is Needed
9:00 How to Buy Insurance
11:44 The NXM Token
12:51 Token Economic Model
16:14 Price Potential & WNXM
18:22 Final Thoughts
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⛓️ 🔗 Useful Links 🔗 ⛓️
► Nexus Mutual Website: https://nexusmutual.io/
► Docs: https://nexusmutual.gitbook.io/docs/docs
► Whitepaper: https://nexusmutual.io/assets/docs/nmx_white_paperv2_3.pdf
► Steps for Insurance: https://bankless.substack.com/p/how-to-protect-against-hacks-with
► Parity Hack: https://www.coindesk.com/ico-funds-among-millions-frozen-parity-wallets
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📝 What is Nexus Mutual? 📝
It is a decentralised “insurance” protocol that is built on Ethereum. It allows users to take out ‘cover’ or ‘protection’ for specific risks that exist in the crypto ecosystem.
What makes Nexus Mutual unique from the likes of your traditional insurance company is that that the insurance pool is decentralisaed. Users will pool their assets in a decentralised and transparent manner. Risk is shared amoung the pool and so are the potential rewards.
Their first feature that they have added is ‘Smart Contract cover’. This basically allows users to secure the risk that is presented by smart contract errors or hacks – sometimes some of the most financially costly.
Nexus Mutual is a company that is limited by gaurantee in the United Kingdom. It operates under a discretionary mutual structure which means that all insurance claims are paid at the discretion of the Board
Nexus Mutual was launched back in May of 2019 and it raised an undisclosed sum from early investors including the likes of Kenetic, Blockchain Capital, Collider ventures etc
💭 Why It is Needed 💭
Smart contract bugs & hacks are a real concern in the crypto space. They have happened many times before and are hard to stop. You can audit your contracts and make sure that the code is clean but there are some things that will always escape close scrutiny.
Some of the most recent examples include those of the Parity wallet hack that saw over 500k ETH being locked away forever. You then also have the example of the Yam finance rebasing contract that caused the value of YAM to collapse and the TVL to fall towards 0.
Nexus Mutual allows people to secure themselves against these risks in a decentralised way. They will also share in the success of the mutual as they are members of it as well.
📈 Nexus Mutual Token 📈
The Nexus Mutual token is an ERC20 token that gives users membership to the mutual itself. These tokens represent your membership rights to the mutual. What is important to note here is that they can only be bought and sold on the Nexus Mutual platform.
The token serves a few roles in the Ecosystem:
Firstly, it’s capital effecient and allows for a scalable way to raise capital. Their unique tokenomic model will ensure the inflow of funds only when they are required.
Secondly, it aligns incentives. All of those people who are members of the mutual will benefit from the success of the platform. They will all work towards a more cohesive mutual.
And finally, the token price is directly linked to the adoption and performance of the underlying mutual.
👨🏫 Tokenomics 👨🏫
Nexus Mutual controls the supply, issuance and redemption of the token. This is all based on a continous token economic model where the price depends on how much funds are in the mutual.
The price is a function of the Minimum Capital Requirement (MCR). The higher the MCR, the more expensive the token becomes.
It uses the token price as a means to capitalise the funds. It will dynamically decrease the price of the token which means that it will be cheaper to become a member and hence buy cover.
On the flip side, if more cover is purchased, the capital pool increases. This means that the MCR will also increase but in most cases its less than the capital pool.
WNXM is wrapped token that is redeemable 1 for 1 for NXM tokens. The only small detail is that they can be redeemed by someone who is a member
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📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.
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