What Is Nexus Mutual?
Nexus Mutual is a decentralized alternative to insurance that uses blockchain technology to form a mutual risk-sharing pool. This gives consumers control over their insurance by eliminating intermediaries.
Background
Hugh Karp founded Nexus Mutual in 2017.
How It Works
Built on the Ethereum blockchain, Nexus Mutual allows anyone to join as a member and purchase coverage to protect themselves from smart contract exploits. The mutual is entirely owned by the holders of its native governance token, NXM.
Members of Nexus Mutual are incentivized to participate in Risk Assessment, Claims Assessment, and Governance. NXM token holders can introduce and vote on governance proposals. For claims assessment, NXM can be staked to vote on insurance claims, with tokens locked for extended periods for votes against the consensus and fraudulent votes leading to the stake being burned. For risk assessment, NXM can be staked against any smart contract to lower the cover price, with successful cover purchases earning more NXM for the staker. However, a portion of the staked NXM may be burned if a valid claim is made. NXM is also used to purchase coverage, with 90% of the used NXM being burned and the remainder retained by the member for use when submitting claims.
Key Takeaways
- Nexus Mutual is a decentralized alternative to insurance that uses blockchain technology.
- It was founded by Hugh Karp in 2017.
- The mutual is entirely owned by the holders of its native governance token, NXM.
- NXM token holders can participate in Risk Assessment, Claims Assessment, and Governance of Nexus Mutual.
- NXM is used to purchase coverage, with a portion of it being burned and the remainder retained by the member for use when submitting claims.
