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Blockchain Healthcare

What Is Nexus Mutual And How Does It Work?

Nexus Mutual, an Ethereum-based platform, creates insurance products that are community-driven and have financials. Smart Contract Cover is Nexus Mutual’s initial product. It protects against smart contract flaws for smart contracts that are used on different decentralized finance (DeFi), platforms.

It is a decentralized autonomous organization (DAO) that is owned entirely by its members. The NXM token is used to maintain membership, provide rewards and has voting rights on the Nexus Mutual network.

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Nexus Mutual, a platform built on blockchain technology, offers decentralized insurance products. Complex conglomerates dominate the $4.3 trillion USD insurance industry.

They have established models and processes that are driven by profit margins, premiums and reinvestment.

Nexus Mutual’s blockchain disrupts the insurance industry by rewiring stakeholder incentives and proactively assessing risk, while collecting financials.

Nexus Mutual is registered as a limited business guarantee business in the United Kingdom. It is structured and managed as an Ethereum-based autonomous organization (DAO), wholly owned and controlled by its members.

Nexus Mutual DAO stores members’ funds in a risk-sharing pool and uses these funds to pay claims. Nexus Mutual asks its members to accept coverage proposals and to fund pools that guarantee coverage. There are additional rewards through the NXM token.

Nexus Mutual was initially founded with Smart Contract Cover. This covers smart contract bugs, hacks and other security risks. Smart contracts are a new technology written in Solidity, a new programming language.

It is difficult enough to ensure that your code is free from errors and other risk vectors. Smart contracts can be executed for millions, sometimes even billions, of dollars.

This makes managing risk a daunting and urgent task. Nexus Mutual employs a system that democratizes risk assessment and pools claim staking in order to protect against financial loss.

Anybody can become a Nexus mutual member. This allows them to buy Nexus Mutual’s native token NXM. NXM can be used to buy insurance coverage or to participate in Nexus Mutual’s governance process.

NXM’s governance protocol allows you to evaluate the risks associated with certain smart contract and vote on whether to accept claims. This makes NXM a multifaceted utility token that fuels NXM.

NXM tokens can only be bought on the Nexus Mutual platform and are not available on any exchanges. NXM tokens cannot be transferred between Nexus Mutual members.

NXM’s price changes depending on how much capital a mutual has, and the amount it requires to meet its claims. NXM’s price increases when the mutual has enough capital, while it decreases when it needs more funds.

Nexus Mutual Purchasing Coverage

You must have the following information in order to purchase Smart Contract Cover:

  • Specify the smart contract address you want coverage for
  • Specify the coverage amount, time period and currency (ETH, DAI).
  • Generate a quote
  • You can purchase coverage by authorizing a transaction through your Metamask wallet , and paying with NXM or ETH
  • Pay a new membership fee of 0.002ETH to undergo a Know Your Customer (KYC), and Anti-Money-Laundering (AML), screening

Nexus Mutual members are called Risk Assessors. They have expertise in smart contracts auditing. Coverage can be initiated if a smart contract is deemed safe by Risk Assessors. Risk Assessors contribute NXM to the coverage pool. These stakes will be used to cover claims in the event of a breach. Risk Assessors can only stake on contracts they trust.

Risk Assessors tokens are kept for 90 days after they have been staked. A specific formula determines the final cost of coverage.

It takes into account inputs such as the requested coverage amount, time period and NXM staked. The entity that requests coverage is then paid a percentage to the Risk Assessors.

Nexus Mutual can cover all Ethereum smart contract addresses provided there is sufficient NXM staked in order to cover claim liability.

Many leading Decentralized Finance (De Fi), platforms such as Maker, Compound, Curve and Uni swap are covered by Nexus Mutual in 2020.

The coverage can be extended for as little as one day and can include insurance stakes of anywhere from 1 ETH up to 50,000 DAI.

This creates a vibrant marketplace of community stakeholders who work together to improve code and reduce financial losses.

Blockchain And Isurance: Governance On Nexus Mutual

Nexus Mutual is managed by its members and an advisory panel through its DAO. The advisory board consists of five members, including company founders and industry experts in smart contract security and insurance, mutual, and legal and regulatory issues. To replace a member of the board, any member can vote into the advisory board.

You can submit a proposal via its governance platform to make changes to the Nexus Mutual Blockchain protocol. The advisory board will review your proposal and suggest an outcome.

They will then determine the NXM rewards for members who vote. NXM is used to vote. Your stake in NXM is what determines the weight of your vote.

Rewards are not distributed according to how many tokens a voter staked, but rather between members who vote. This allows for a more equitable and fair reward system that is not dependent on NXM holdings.

Nexus Mutual’s Smart Contract Cover has been an integral part of the DeFi ecosystem. This is because the sector, which is risk-forward and disruptive, continues to innovate.

Future Nexus Mutual insurance products include crypto wallet coverage as well as traditional insurance products such as coverage for natural catastrophes.

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