TIP-022 - $250,000 investment from treasury into Nexus Mutual | HectroDAO Ann

TIP-022 - $250,000 investment from treasury into Nexus Mutual ($wNXM)

We believe additional investments in established projects at current market conditions will help to further grow our treasury. Diversity minimises the risk and makes growth possible.

Nexus Mutual uses a risk-sharing pool that allows anyone to purchase on insurance cover or contribute their capital to the pool for future rewards. Nexus Mutual tries to disrupt the insurance industry by transitioning the power over the pooled resources to the individual people. Anyone is allowed to participate, as the mutual is owned by its members. Users can contribute Ethereum (ETH) to the pool for NXM.

Nexus Mutual is taking on the issue of smart contract vulnerability and provides users with a level of protection that can help avoid losses.

Nexus Mutual’s first product were smart contract covers that provided protection for value storing contracts. In order for the project to start processing claims, it needed to reach a pool of 12,000 ETH, which was achieved two months after the launch.

The NXM token represents the membership rights in Nexus Mutual, along with the ability to participate within the ecosystem through claim and risk assessments and governance. The token leverages a bonding curve to determine the price, which is driven by how much capital the Mutual has and how much capital it needs to meet all of the claims with a certain probability.

Users can stake NXM to vote on claim assessments and on whether or not a certain claim needs to be paid out. The members who decide to vote in accordance with the consensus are rewarded with NXM, whereas the ones that vote against it have their tokens locked for a period of time.

Members fulfill several roles, one of which is that of assessing the risk of each smart contract. Whenever a claim is filed, they are responsible for voting on the legitimacy of that claim and on whether the payout can be made or not.

Members can also use their tokens to vote on smart contracts based on how secure they think each particular contract is. The more NXM is staked on a smart contract, the cheaper it becomes to purchase cover for it; the large amount at stake is an indicator that the contract is considered safe by many members.

After TIP-022 ends, we will withdraw $250,000 from the Treasury to a secondary wallet and will perform the investment in the following hours. (We'll analyse the target project chart to find the best moment to jump in, and may do multiple smaller transactions instead of a big one).

Vote below:
https://vote.hectordao.com/#/proposal/0xa530872e89e16e2a5fb90f5a0710f2d29ee240abc3fc61adfed942382ad04f68