Thread by @DeFi_Dad

@NexusMutual is a decentralized alternative to insurance, providing the #Ethereum community protection against hacks.

Here's why it should be on your radar:
➕Anyone can buy smart contract insurance
➕Being a backer (staker) can earn up to 50% ROI
➕It's powered by #Ethereum

1⃣ Why Nexus? It's the best/only protection against a black swan/bug in a value-storing #DeFi app.

So if your options are:
❌No protection
✅New insurance that has 28% more capital on-chain than required to pay all claims, what do you choose?

Duh! [see nexustracker.io/capital_pool]

2⃣With that framing, data from nexustracker.io indicates @NexusMutual has quietly built one of the most successful #DeFi apps to date.

🚀$2.9M USD (13,141 ETH) staked by backers (Risk Assessors)
🚀9,915 ETH in total coverage (what's insured)
🚀Avg coverage = 93.5 ETH

3⃣So I can either get insured or stake value in the form of NXM, vouching for the security of the contract.

Here's how I bought coverage myself against hacks:
💥Go to app.nexusmutual.io/#/SmartContrac…
💥Choose a dapp icon or paste in an SC
💥Choose cover to be in ETH or DAI
💥For how long

4⃣Btws, if you're a first-timer with @NexusMutual, you do have two administrative tasks before buying insurance or else you'll be prompted to do so after buying:

💵Become a member by paying a small fee in ETH (<$2)
💳Submit to KYC (I know it sucks but it's reality)

5⃣Once you buy @NexusMutual coverage, you're instantly covered!

💥365 days coverage costs ~1.3% of cover amt, if you prefer payout in ETH.
💥Coverage in DAI is much more costly.
💥Use "Manage Cover" in your dash but there's no reminders when it expires app.nexusmutual.io/#/ManageCover

6⃣If you made it this far, here's the bigger opportunity I'm into.

@NexusMutual is still early, so there's fewer #DeFi users paying for SC insurance.

If there's only $2.9M in active covers and still $973M in DeFi TVL (excluding Lightning Network no one uses), Daddy is excited!

7⃣The previous tweet shows the total NXM (in USD) staked per contract (aka per app such as Compound).

@compoundfinance is a great example of potential for Nexus because it has:
📊$125.2M in TVL
📊Only $392,000 in active coverage

So, Nexus is only insuring 0.3% of Compound's TVL

8⃣The list grows long as you realize minimal coverage exists for larger value-storing #DeFi apps.

$120k / $597.6M TVL (0.02% of @MakerDAO)
$439k / $19M (2.3% of @dydxprotocol)
$84k / $11.8M (0.7% of @bzxHQ
$9.8k / $4.5M (0.2% of @SetProtocol)
$7.1k / $3.9M (0.18% of @getnuo)

9⃣So given I'm no a smart contract auditor which is what's ideal to vouch for the security of the smart contract, I'm going to choose Maker for now based on the @ConsenSysCodefi DeFi Score of 9.7.

@NexusMutual is underutilized in covering @MakerDAO so I'm willing to try this.

🔟What do I need to be a Risk Assessor (aka staker of NXM)?

🖋️Go to app.nexusmutual.io/#/RiskAssessme…
🖋️Paste in the @MakerDAO SC (0x35d1b3f3d7966a1dfe207aa4514c12a259a0492b) which I found searching nexustracker.io/staking for listed stakers against MakerDAO
🖋️Choose NXM stake amount

1⃣1⃣ If you hadn't bought NXM already, there's a helpful link in the Risk Assessment (aka Staking) section highlighted in green [Buy NXM] to take you to buy it.

Remember, NXM is just a clever way to track who paid for insurance, who backed it, and capacity to cover more/less.

1⃣2⃣ To learn more about the token model behind NXM, go to nexusmutual.io/token-model.ht…

💥Nexus has adequate funds when the money it holds (known as the "Capital Pool") is greater than MCR.
💥MCR% is the ratio of funds held to funds required

👇See how this impacts NXM price

1⃣3⃣ So what's the potential ROI?

💥Once staking, you begin earning 20% commission on all covers purchased.
💥Once you max out commissions at 50% of your stake amount, the next assessor begins earning rewards
💥Otherwise your stake is gradually released over 250 days

1⃣4⃣ But what are the risks?

💥I could be in queue waiting behind others like below with 19 ahead of me for @MakerDAO SC stakers. 146,000 in NXM commissions has to be paid before me.
💥If this coverage remains unused, I could go the full 250 days without earning commission.

1⃣5⃣ Additional Risks:

💥While Nexus has had 3 audits, I always consider we don't know what we don't know, so what if a bug brings it down?
💥Lastly, I could lose my entire stake if a Claim is made. I am staking to vouch for the security of the SC.

If it fails, well so did I!

FIN/ If you made it this far, please consider 3 options.

1⃣Anyone risking money in #DeFi, ought to consider insuring it with the best/only option in #DeFi--@NexusMutual
2⃣If you are looking to earn up to 50% ROI backing Nexus, consider staking NXM.
3⃣Share this with others!

FIN FIN/ The concept of insurance works better the more people are in the pool. So please tell others in #DeFi about @NexusMutual.

Rn most of the $1 billion in TVL is uninsured. I don't think one can debate my logic: better to try and protect oneself than to just not try at all.

@NexusMutual Hoping these #DeFi communities learn about current SC insurance offered by @NexusMutual:

@0xProject
@1inchExchange
@AaveAave
@argentHQ
@compoundfinance
@FlexaHQ
@InstaDApp
@MakerDAO
@getnuo
@paraswap
@SetProtocol
@TotleCrypto
@UniswapExchange
@bzxHQ
@dydxprotocol