Other · Underwriting · wNXM
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.
Member-owned decentralized cover for smart-contract risk.
wNXM price
$50.19
-0.7% 24h
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The longest-running on-chain mutual model with claims-assessed cover rather than parametric triggers — members vote on whether a loss event qualifies.
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.
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.
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.
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.
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.
Launched on Ethereum mainnet in May 2019
Nexus Mutual blog - Six Years of Covering Crypto$2,410,499.26 (1,351 ETH + 129,660 DAI) paid across 14 accepted claims for the Feb 2021 Yearn yDAI hack
Nexus Mutual - Paying claims for the Yearn hackNexus Mutual V2 went live on Ethereum mainnet on 2023-03-15
Nexus Mutual blog - V2 Live on Ethereum MainnetHow Nexus Mutual maps onto established TradFi structures, and where it diverges.
Mutual insurance company / P&O-style mutual
Nexus Mutual
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.
TradFi analogue
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
Nexus Mutual
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.
TradFi analogue
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.
Nexus Mutual (DAO)
Member-owned mutual / DAO NXM token holders collectively own the Capital Pool and all surplus generated from cover sales, and govern the protocol (pricing, products, parameters, claims) through on-chain voting.
Nexus Mutual Ltd (UK legal wrapper)
Discretionary mutual legal entity A UK-registered discretionary mutual that wraps the DAO. It has a Board with deliberately limited powers; members can replace Board members at any time. Founded by Hugh Karp, who launched the protocol on Ethereum mainnet in 2019.
Key milestones: launches, upgrades, exploits and governance events.
Mainnet launch (V1)
ExecutedSmart Contract Cover launches with the bonding-curve NXM model and member-based claims assessment. (Day set to 1st; only month sourced.)
SourcePooled Staking
ExecutedIntroduction of pooled staking, letting members stake NXM across contracts to earn rewards and back underwriting. (Day set to 1st; audited June 2020.)
SourceV2: staking pools, new products, RAMM tokenomics
ExecutedMajor upgrade turning the mutual into a risk infrastructure layer with permissionless staking pools and the Ratcheting AMM replacing the original bonding curve.
SourceIt sells discretionary cover products against crypto risks: smart-contract/protocol failure, yield-token de-pegs, custody (centralized-exchange) failure, slashing and other risks. Cover is bought per-product for a chosen amount and duration, with premiums paid in ETH or DAI.
No. Nexus Mutual is a discretionary mutual, not a regulated insurer. Payouts are decided by members through on-chain claims assessment against the cover wording rather than being legally guaranteed contracts of insurance.
NXM is the membership and capital token. Native NXM is restricted to KYC'd members and can only be minted or redeemed against the Capital Pool via the RAMM. A wrapped version, wNXM, trades freely on secondary markets without membership.
Valid claims are paid from the member-owned Capital Pool after members stake NXM and vote to approve them under the cover wording. Historically, valid claim payouts have typically settled within a few days of assessment.
Members deposit NXM into staking pools that underwrite specific cover products. As cover is sold from a pool, stakers earn NXM rewards; in return their staked capital is at risk of being burned to pay approved claims on the products they underwrite.
