Nexus Mutual is the industry-leading provider for onchain cover. The user-governed decentralized insurance alternative allocates idle crypto assets held in its capital pool to generate returns that offset future claim payouts. Members can purchase cover to protect crypto assets and stake the native NXM token to underwrite risk. To date, Nexus Mutual has secured $5.1B+ of crypto assets and paid $18M+ in claims to people affected by onchain loss events.
In 2020, Nexus integrated Chainlink Price Feeds to ensure its multi-currency capital pool reflects the most accurate market prices. In 2022, Nexus expanded its Chainlink integration by using Proof of Reserve (PoR) to monitor investments in protocols where liquid secondary markets are not available.
A new case study from Nexus, Chainlink, and onchain asset management protocol Enzyme Finance illustrates how Nexus can access new strategies for its capital pool via PoR and Enzyme’s integration of Chainlink Price Feeds.
Nexus leveraged Enzyme’s platform to launch the Nexus Mutual Treasury Yield, a private vault for allocating capital across multiple strategies. To date, Nexus has opted for low-risk ETH staking strategies using Chainlink-supported liquid staking tokens (LSTs) with deep liquidity. In order to expand its potential allocation strategies, Nexus requires an oracle solution to provide pricing data for crypto assets backed by ETH staking strategies where no LST is available.
Creating bespoke oracles for each new allocation would require significant engineering resources and introduce unnecessary risk. Because Enzyme’s protocol provides 24/7 onchain reporting powered by Chainlink Price Feeds, Nexus Mutual’s Enzyme Vault integrated PoR to publish real-time reserves data to the Nexus Mutual protocol, unlocking a variety of options for capital pool allocations that were previously unavailable.
“By leveraging Chainlink Proof of Reserve, we can expand ETH staking accessibility for Capital Pool assets allowing us to offset future claims and reliably calculate the asset-backing for the NXM token,” said Nexus Mutual’s founder, Hugh Karp, in an official announcement.
Karp, whose founder’s journey is featured in Chainlink’s Block Stories docuseries, conceived the idea for Nexus Mutual from a desire to take insurance “back to its roots” with blockchain infrastructure like PoR that powers efficient, transparent systems based on cryptographic truth.
Enzyme’s founder, Mona El Isa, further emphasized how protocols like Nexus can exponentially increase their capabilities via Chainlink.
“With Enzyme integrating Chainlink Price Feeds, Nexus significantly bolstered its product without the overhead of having to engineer its own proof of reserves solution,” she said. “The ability to incorporate DeFi strategies into its portfolio significantly opens up the possibilities for asset management strategies, making it possible to include activities where the underlying asset prices are supported by Chainlink.”
To learn more about Enzyme Finance, visit their website, X, Telegram, and Discord.
To learn more about Nexus Mutual, visit their website, X, Telegram, Discord, and GitHub.