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I have a small following so I can give out free NXM alpha, my handle is Krypto Alpha after all.
What is NXM & what is all this hype?
A thread
What is NXM & what is all this hype?
A thread
Nexus Mutual is a mutual (lol) offering smart contracts covers - i.e insurance. Obvious need considering the risk in DeFi.
Native token that gives membership rights, ability to get insurance, vote on claims etc. is NXM.
Native token that gives membership rights, ability to get insurance, vote on claims etc. is NXM.
Bonding Curves - Interesting
This is practically the model used for NXM. The more ETH goes into the protocol, the higher the value of NXM tokens.
I guess the problem only emerges if insurance covers needed start to drop (unlikely now) and people redeem tokens for ETH.
This is practically the model used for NXM. The more ETH goes into the protocol, the higher the value of NXM tokens.
I guess the problem only emerges if insurance covers needed start to drop (unlikely now) and people redeem tokens for ETH.
Minimum Capital Requirement (MCR)
The ratio of funds held to funds required which is set at 130%. Set to keep the probable ability to pay out all claims high. The capacity can only increase by 1% a day if the capital pools get excess capital. But that’s a problem...
The ratio of funds held to funds required which is set at 130%. Set to keep the probable ability to pay out all claims high. The capacity can only increase by 1% a day if the capital pools get excess capital. But that’s a problem...
DeFi hype came and more needed to be insured. Nexus’ problem literally became too much demand and not being able to cover fast enough at 1% increments per day.
Proposal 83 came in when pools were at 15.5k ETH and actioned 6 increases per day till the protocol hits 100k ETH.
Proposal 83 came in when pools were at 15.5k ETH and actioned 6 increases per day till the protocol hits 100k ETH.
As I understand it, mathematically these excess increases screw with the token price model’s ability to increase exponentially and has slowed it down.
Fortunate event: the mutual is 73ETH away from going back to one increase per day. This is where shit gets real.
Fortunate event: the mutual is 73ETH away from going back to one increase per day. This is where shit gets real.
If too many contracts covered fail and the mutual has to pay out claims that will decrease the token’s price too and I think that is the main risk today because demand dropping is unlikely at this moment in time.
S/O to both @Arthur_0x and @Blockchain_C for all the alpha drops
Below is a highly recommended post https://medium.com/fitzner-blockchain-consulting/the-potential-for-bonding-curves-and-nexus-mutual-8d31a98704b5
Below is a highly recommended post https://medium.com/fitzner-blockchain-consulting/the-potential-for-bonding-curves-and-nexus-mutual-8d31a98704b5
I forgot to add an important point. Buying directly from the mutual requires KYC and not everyone is happy with this which is why wNXM was created. For pure speculators.
