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)
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)