1. When human subjectivity and trust enters into what are supposedly (rarely are) trustless and automated systems things break.

2. While legacy insurance, ink contracts and related laws are slow & conservative, this is what happens when things fall apart and aren't papered. https://twitter.com/kferretcrypto/status/1358248078931730432

3. As far as I can tell, this isn't an @NexusMutual failure; it's a dispute between a coverholder and someone to whom recovery rights were "staked".

4. In the traditional world of insurance, this might have been an assignment of rights.

5. If real insurance and an assignment, the disputed funds could be interpleaded into the court's register, and the court would determine ownership.

6. There's no interpleader contract here so ... this could all certainly be litigated but funds (I think) are already transferred.

7. I've been reading and litigating insurance claim denials (and correspondence re related disputes) for years and gotta say that this is the same old same old.

Good old human subjectivity. Nothing smart or contract about it. Ipse dixit with blockchain saccharine.

8. You could build an interpleader contract triggered in the event of a dispute; that would at least mitigate one-sided subjectivity to a degree. Or prohibit staking (cf. assignment) of insurance proceeds.

9. I don't personally love the idea of staking this sort of asset. There's all kind of moral hazard built into this, on both sides.

10. The tech for automating simple parametric losses is not that hard to tool, and already exists in a mature enough form. The harder parts are totally off chain, and involve human emotion, subjectivity, greed, risk, decision-making, etc. Ignore that and it'll bite you later.