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BraveNewDeFi Ξ bravedefi.eth Profile picture
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8 Apr, 7 tweets, 2 min read
Happy Thursday, everyone!

Here are today’s @NexusMutual helpful threads!

I'm going with information about buying cover through the Mutual 🐢
When a member wants to purchase cover, they can choose cover for any of the 68 protocols’ smart contracts & 10 custodians: app.nexusmutual.io/cover

A member would click “Buy Cover” to get to the interface where the protocol or custodian is selected. (1/6)
In the “Buy Cover” menu, you can see all of your options, which looks like the below. The “Yearly Cost” and “Capacity” for each platform. (2/6)
Yearly Cost: the percentage of the cover amount you pay as a premium for a 1-yr period.

If you bought cover for 4 months, you would pay 0.87% of the cover amount as the premium for the cover.

Capacity: the amount of cover available on the platform in terms of ETH & DAI. (3/6)
The member then selects the amount of cover in either ETH or DAI and the duration of cover. After they enter in their amount and duration info, they’ll be generated a quote. (4/6)
After that process, you’ll proceed to payment and you’ll have cover for the amount and duration of your choosing!

When you purchase cover, 90% of the NXM used for the cover purchase is burned and 10% is reserved for the claims process should a loss occur. (5/6)
Buying cover is an easy process for members and covers their assets in DeFi and in the possession of centralized custodians.

The next thread I’ll cover today will detail how to file a claim in the event of a loss. (6/6)

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More from @BraveDeFi

BraveNewDeFi Ξ bravedefi.eth Profile picture
8 Apr
If a mutual member’s funds are lost due to an event outlined in the cover agreement, they can file a claim.

Any cover purchased after 21 October 2021 requires proof of loss when filing a claim. (1/9)
As I mentioned in the tweet below, 10% of your cover premium is reserved for filing a claim. You need to stake 5% of the cover premium to file a claim.

Because 10% is reserved for filing a claim, you can submit a claim for assessment 2 times. (2/9)
If a claim is accepted, the 5% staked for claims assessment is returned.

If a claim is denied, the 5% staked for claims assessment is forfeited. (4/9)
Read 8 tweets
BraveNewDeFi Ξ bravedefi.eth Profile picture
7 Apr
The mutual’s capital pool is held in ETH. Below you can see a graphic that shows how funds flow through the capital pool when cover is purchased. (1/7)
Funds flow into the capital pool when cover is purchased & when ETH is swapped for $NXM.

When capital levels in the pool are low, the price of $NXM lowers to encourage token purchases, which add funds to the capital pool. (2/7)
Each member has contributed to the capital pool as represented by their $NXM holdings.

When more members purchase cover to protect assets, the capitalization level increases.

As the capitalization level increases, the MCR% goes up, too, since MCR% = V/MCReth. (3/7)
Read 7 tweets
BraveNewDeFi Ξ bravedefi.eth Profile picture
7 Apr
The bonding curve determines the price of $NXM using a formula with multiple inputs. In the graphic, I have included the fixed constants. Because the capital pool is held in ETH, the bonding curve uses MCReth as a factor in the equation. (1/9)
The graphic in the previous tweet is from the latest post Nexus put up on their Medium about the bonding curve. More on that here: (medium.com/nexus-mutual/o…)

If you see this equation and feel your mind going blank, don’t worry: I’ve got you. (2/9)
MCReth = Minimum Capital Requirement in ETH. The floor amount was first set by the Nexus team when the protocol went live on mainnet, but members have voted since then to change the threshold for MCReth. (3/9)
Read 9 tweets
BraveNewDeFi Ξ bravedefi.eth Profile picture
7 Apr
Here are today’s @NexusMutual helpful threads!
Membership in Nexus Mutual is represented by the $NXM token.

The $NXM token is the key that unlocks Nexus Mutual’s potential. (1/8)
Members use $NXM to buy cover, stake as Risk Assessors and Claims Assessors, and vote in governance.

NXM can only be purchased through the mutual’s bonding curve, and only members can hold NXM tokens. Just the same, NXM can only be transferred between members. (2/8)
Read 9 tweets
BraveNewDeFi Ξ bravedefi.eth Profile picture
6 Apr
In order to buy cover through Nexus Mutual, you need to be a member. It’s an easy process.

You need to pay a membership fee of 0.002ETH and undergo a KYC/AML check.

You can read the details here: app.nexusmutual.io/membership (1/5)
There are many benefits for mutual members.

You can buy cover products and protect your assets in DeFi.

Members run the mutual. They are responsible for Risk Assessment, Claims Assessment, and Governance. (2/5)
Risk Assessors create open cover by staking $NXM against platforms they believe are trustworthy/secure.

Claims Assessors review claims & vote using their discretion on whether to accept/decline a claim.

Members create proposals & vote to implement changes in the mutual. (3/5)
Read 5 tweets
BraveNewDeFi Ξ bravedefi.eth Profile picture
6 Apr
A lot of people think @NexusMutual sells insurance, and as I covered in my first thread, that isn’t quite accurate.

The mutual offers cover products: smart contract cover and custody cover.

Nexus Mutual members can buy cover to protect deposited assets. (1/9)
Smart contact cover gives members protection against losses due to hacks/exploits and/or smart contract code being used in an unintended way. Wording here: nexusmutual.io/pages/SmartCon… (2/9)
Custody cover gives members protection against losses due to a custodian being hacked, which results in a material loss of 10% of cover or greater OR if withdrawals are halted for more than 90 days. Wording here: nexusmutual.io/pages/CustodyC… (3/9)
Read 9 tweets

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