Adam Benayoun Profile picture
14 Sep, 14 tweets, 4 min read
1/ I love the $SAFE experiment built by @chefinsurance on top of yinsure (@AndreCronjeTech) and $NXM (@HughKarp). Disclaimer; I'm an investor in $NXM and obviously am biased. This is NOT investment advice.
2/ $SAFE and yinsure are some of the greatest example of what open source in general and crypto specifically can achieve when great minds collaborate together and build different products on top of each others.
3/ I love the fact that $SAFE has unlocked new possibilities to earn yield while encouraging $SAFE yield farming. Until now $NXM main appeal was IMHO mainly catered toward institutional / regulated entities who had a fiduciary responsibility to protect their $$.
4/ However $SAFE has unlocked a new behavior and it is SAFE yield farming, most yield farmers are possibly OK with the risk of losing everything and are not mentally wired to take insurance on their bets. $SAFE is promoting the concept of SAFE yield farming / retail staking.
5/ Overall this is a really neat way to incentivise people to stay safe, just go straight for their main addiction; yield farming. I still have no idea what value will $SAFE have but I can think of many way to create utility.
6/ One way would be to create products that would utilize $SAFE as its governance token, $YFI just validated the concept that community market fit is valuable.
7/ Another neat idea would be that some DeFi platforms would prioritise yield / utilisation / capital efficiency if you hold $SAFE proportionally to your stake. This would be used as some sort of membership signalling you're a safe defi investor.
8/ Stressing out $NXM and yinsure ($YFI) with the release of $SAFE has also some positive unintended consequences. Someone earlier found a loophole thru yNFT that allowed the circumvention of contract limited instilled by $NXM
9/ This is unfortunate because it also created increased risks for $NXM but it puts the spotlight on potential issues that need fixing; both the limit but also the fact that 1.3% premium is probably way too low of a cost for insurance coverage.
10. In addition, staking wNXM on $SAFE is probably a noble idea (rewarding NXM holders for supporting the underwriting platform that power all insurance on $YFI and $SAFE) but it also created better incentive to unstake from NXM
11/ and seek the best yield elsewhere. This has created now a potential issue where decreasing staking on NXM will create a negative feedback loop where less insurance coverage could be taken - assuming the loophole on yInsure will be fixed :)
12/ However the positive consequence of that is that @HughKarp and the $NXM community are now 100x more incentivised to look at ways to make staking more lucrative on $NXM which in turn will create more value for $NXM holders.
13/ I've always been bullish on crypto but up until now, most collaborations were fluffy marketing / PR based to pump value into useless / questionable tokens. The last wave of builders have created products / platforms / derivatives that are interoperable and exchange value...
14/ I don't think you can feel how excited I am by the recent development in the space through this tweet - but I am. Thanks @AndreCronjeTech @chefinsurance and @HughKarp for building and preserving the ethos of Open source. Fin

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