Nexus Mutual

Nexus Mutual is a mutual where members pool capital to underwrite smart-contract and protocol risks. Claims are assessed by member vote; NXM (wrapped as wNXM for trading) governs the mutual and backs the capital pool.

The longest-running on-chain mutual model with claims-assessed cover rather than parametric triggers — members vote on whether a loss event qualifies.

- Capital Pool: A shared, member-owned pool of crypto assets (ETH, DAI, stETH and other tokens) that backs the NXM token, underwrites all active cover, and is the reserve from which valid claims are paid. Its size relative to the Minimum Capital Requirement (MCR) determines how much cover the mutual can sell. - Cover Products: On-chain cover policies members purchase to protect DeFi positions. The mutual offers 100+ products spanning protocol/smart-contract cover, yield-token cover, custody (centralized exchange) cover, slashing and other crypto-native and real-world risks. Premiums are paid in ETH or DAI and priced by the underwriting staking pools. - Staking Pools (V2): Introduced in V2, staking pools let expert managers deposit and manage NXM as underwriting capital, choose which cover products to open capacity for, and set risk-based pricing. Passive members can delegate NXM to a pool and earn NXM rewards as cover is sold from it. - RAMM (Ratcheting AMM): A two-pool automated market maker sitting on top of the Capital Pool that lets members mint NXM (contributing ETH in the 'above' pool) or redeem NXM for ETH (burning it in the 'below' pool). A ratchet mechanism nudges the price toward Book Value during inactive periods. It replaced the original bonding-curve mint/burn model in the V2 tokenomics upgrade. - Claims Assessment: The member-governed process for adjudicating claims. Members stake NXM to vote on whether a submitted claim meets the cover wording; approved claims are paid from the Capital Pool. Claims can be submitted after a waiting period following a loss event and within a defined window after cover expiry.

- Wrapped NXM (wNXM) — Token, Mutual membership + governance (wrapped NXM) - NXM (NXM) — Receipt, Member-restricted; wNXM is tradable form

- Reserve / Depeg: The mutual can only pay claims up to what the Capital Pool holds. A cluster of large correlated losses, or a sharp fall in the value of pool assets (ETH/stETH), can push capital below the Minimum Capital Requirement, forcing the mutual to stop selling cover and impairing its ability to honor outstanding cover. - Governance: Cover payouts are discretionary and decided by NXM-staked members via claims assessment. Voter apathy, whale concentration, or a member majority acting in self-interest could wrongly reject valid claims (leaving policyholders unpaid) or approve invalid ones (draining the pool). - Smart Contract: The Capital Pool, RAMM, staking-pool and cover contracts hold and move all member capital on-chain. A bug or exploit in this stack could drain reserves directly, the same failure mode the mutual exists to insure against, making it its own single point of failure. - Counterparty: V2 delegates underwriting to permissionless staking-pool managers who choose which products to back and how to price them. Mispriced or over-concentrated pools can leave the mutual under-reserved for a given risk, and delegators bear burn risk from a manager's poor underwriting. - Regulatory: Nexus Mutual operates as an unregulated UK discretionary mutual, not a licensed insurer, and NXM membership is KYC-gated with native NXM non-transferable. Regulatory reclassification of its cover as insurance, or of NXM/wNXM as a security, could restrict operations or market access.

- Mutual insurance company / P&O-style mutual: similar — Like a traditional mutual insurer, the members are the owners: they pool capital, share risk, keep any underwriting surplus, and collectively decide on claims rather than paying a shareholder-owned carrier.; differs — Cover is discretionary (payouts voted by members under cover wording, not a legally binding insurance contract), it is unregulated as insurance, capital is on-chain crypto, and underwriting/claims are executed by smart contracts and token-holder governance. - Lloyd's-style syndicated underwriting: similar — V2 staking pools resemble Lloyd's syndicates: specialist underwriters bring capital, pick which risks to back, and price them, while passive capital providers can back the underwriters.; differs — Anyone can spin up a staking pool permissionlessly, capital is NXM staked on-chain, and there is no regulated managing-agent structure or legally binding policy.