Nexus Mutual is an innovative insurance protocol that focuses on smart contract cover. The blockchain project allows individuals to purchase smart contract cover and members control a large portion of the protocol, its functionality, and various changes that should occur.
NXM is the governance token of the protocol and can also be staked by members who contribute to certain decisions regarding the risk of certain smart contracts.
The NXM token is currently the 227th largest cryptocurrency by market capitalization.
How Nexus Mutual (NXM) Works
Nexus Mutual is essentially a “mutual” but in an innovative way that incorporates blockchain technology. Nexus Mutual members form a critical part of the protocol and are essentially responsible for the project’s success and the direction of the project.
The key difference between Nexus Mutual and traditional insurance companies is that policyholders in Nexus Mutual are benefactors of the profit generated by the protocol. Essentially, NXM token holders receive a portion of the revenues generated by the protocol.
In traditional insurance models, this is never the case, and more often than not, the people at the top always take the biggest cut and leave the policyholders with little to nothing.
The innovative blockchain protocol incorporates both unique and traditional features that are seen in current traditional models. This can be seen as advantageous and disadvantageous, but the principle of the protocol is innovative, to say the least.
Some of the key differences of the Nexus Mutual protocol are that users aren’t protected from traditional things such as disability or damage to property; instead, they’re only protected with regards to crypto, specifically smart contract cover.
The basis of the protocol focuses on smart contracts and the smart contract code; a risk assessment is performed on individual smart contracts when establishing smart contract cover.
Essentially, the protocol helps protect against DAO hacks and exploits and is looking to protect against wallet hacks in the future. The Nexus Mutual team, along with its advisory board members, are revolutionizing the principles of a standard insurance company and transitioning it to incorporate digital asset cover for individuals and businesses.
Smart contract failure is a danger, and there have been several incidences recently where contracts have been hacked and retail investors, institutions, and all parties involved have lost substantial amounts of money. Most notably, the Axie Infinity Ronin Bridge hack where $650 million was hacked.
he protocol aims to price users and businesses with an additional layer of security and the protocol has been rather firm about what event would warrant a payout and when the protocol would pay potential claims.
The claims assessment is clearly defined; the claims assessment includes a list of protocols such as Anchor Protocol which recently suffered enormous losses. The claims for this protocol are currently listed as ‘denied’.
Payouts can only be triggered under certain circumstances – phishing attacks or network congestion issues don’t warrant a payout. Similarly, all external participants of smart contracts such as miners are not eligible for smart contract coverage.
Smart contract covers are a relatively new concept and an individual wanting to buy smart contract cover should thoroughly research how the protocol works and certain factors that could affect payouts – this is essential to understand before investing in the protocol.
Individuals wanting to learn more about the protocol and how it works can read through the whitepaper.
What Is Nexus Mutual (NXM) Used For?
The Nexus Mutual platform is used by individuals wishing to purchase smart contract insurance. The protocol is incredibly innovative because members can decide the risk assessment level associated with particular smart contracts.
If there is an exploit, members are tasked with the responsibility of reaching a consensus as to whether a payout should occur and whether claims are legitimate or not.
The principle is very innovative, Nexus Mutual members can stake NXM with particular smart contracts, and the more they stake is indicative of how much they trust the smart contract. Essentially, smart contracts that have more NXM staked are seen as low-risk, and therefore buying coverage for the smart contract is cheaper.
If your staked NXM is in a higher-risk smart contract, you could potentially lose a portion of your stakings if the smart contract is hacked – followed by a claim.
Additionally, NXM is a cryptocurrency that experiences price volatility and fluctuations like any other cryptocurrency. Swing and arbitrage traders aim to capitalize on these price differences. This can be incredibly profitable, but it is also highly risky.
Where To Buy Nexus Mutual (NXM) Token
NXM tokens have recently grown in popularity and are currently traded on most major cryptocurrency exchanges. The value proposition of the blockchain product is very unique and has resulted in the project gaining a large amount of attention recently.
NXM tokens are commonly traded on most centralized crypto exchanges. Before you’re able to purchase NXM, you’ll need to deposit fiat money onto an exchange; sequentially, NXM tokens will then be credited to your digital wallet on the exchange.
The crypto exchanges below are amongst the safest place where you can buy, sell and store tokens.
Token holders often opt to transfer their tokens off-exchange. Many individuals prefer this because they want access to their private keys, and storing tokens on an exchange can be risky.
NXM tokens will need to be staked in a smart contract if members wish to participate in the protocol. NXM token holders that stake their tokens also receive voting rights that they can exercise when proposals arise, when deciding whether smart contracts are risky or not, and when there are claims disputes.
Only members of the protocol can participate in proposals. The token model of the protocol is unique, and when an individual wants to purchase cover, they can first research the particular smart contract’s security and potential smart contract vulnerabilities.
About Nexus Mutual (NXM)
How long has Nexus Mutual (NXM) existed?
Nexus Mutual was initially founded in 2017 by Hugh Karp. It is a UK-based smart contract cover project that protects users against financial loss on particular smart contracts.
The team has vast experience in insurance, including UK life operations and various other sectors. The five advisory board members also play a key role in the protocol and provide qualified technical guidance and make suggestions regarding the token model, user experience improvements, and other important factors.
What’s controversial about Nexus Mutual (NXM)?
There are several controversies in the crypto space and this is because the sector is incredibly innovative, misunderstood, and largely unregulated. Individuals need to do as much research as possible before getting involved in crypto; it’s essential to understand the fundamentals in the crypto and blockchain space.
To avoid risky investments, individuals need to research the legitimacy of projects, their partners, and a host of other important factors surrounding the project.
Let’s take a look at the top controversy surrounding Nexus Mutual (NXM):
- Refusal to Pay Out Claims – The Nexus Mutual insurance company deals with claims assessment. Mutual members are tasked with deciding the risk associated with certain smart contracts and, if claims arise, whether they should be paid out or not.
- In principle, this seems like a perfect system, but the system doesn’t function as optimally s some may think. The biggest issue is the refusal to pay out claims, most notably, a hack occurred on Badger DAO and Nexus Mutual refused to pay out members who took out coverage.
How many Nexus Mutual (NXM) Tokens are there?
At the time of writing, Nexus Mutual (NXM) has a circulating supply of 6,515,078.28 NXM
The total supply of Nexus Mutual (NXM) is 6,789,383.
Can Nexus Mutual (NXM) be mined?
NXM tokens can’t be mined. NXM tokens are the governance token of the protocol and have distinct functionality – members can stake their tokens to participate.
The protocol uses a proof of stake mechanism to achieve optimal functionality. This means that NXM tokens, unlike proof of work tokens, can’t be mined.
However, users can earn yields on their NXM tokens by utilizing DeFi products such as farming and liquidity provision.
Some centralized exchanges allow users to earn yields from staking their NXM tokens.
What is the market cap of Nexus Mutual (NXM)?
The market cap of Nexus Mutual (NXM) is: the total amount of coins in circulation x the current market price of NXM.
Nexus Mutual (NXM) Market Cap = 6,515,078.28 NXM x $36.06 = $234 million (227th largest market cap)
NXM is currently one of the top 500 cryptocurrencies by market capitalization.
Biggest Competitors Of Nexus Mutual (NXM)
The blockchain insurance sector is relatively undersaturated, and Nexus Mutual has already established itself as a top project.
Nexus Mutual’s Biggest Competitor is:
- inSure Defi
What Are The Future Plans of Nexus Mutual (NXM)?
The protocol aims to grow its utility, improve its unique value propositions and bolster user adoption.
Pros And Cons Of Nexus Mutual (NXM)
- Innovative Protocol – The Nexus Mutual project provides users with a unique solution and this has led to the project growing in popularity in recent months.
- Real Use Case – The blockchain space is plagued by vulnerabilities and exploits, and Nexus Mutual aims to provide members with much need protection against smart contract vulnerabilities, exploits, and failures.
- The Protocol Hasn’t Live Up To Its Claims – The protocol has, on multiple occasions, refused to pay out claims made by members who took out coverage on certain smart contracts. This has led to many individuals seeing the project as scammy and untrustworthy.