Staking Router Module Proposal: Simple DVT

Proposals
15

Hi all

Thought it was worth highlighting a few of the key points that have been raised re the Nexus Mutual proposal. We’re also very much looking forward to working with the DAO to fine tune the coverage to suit your needs.

How it works:

Nexus Mutual exists on the Ethereum chain. Any wallet can KYC and join the membership of the mutual by paying a nominal fee via an on-chain transaction. Once approved, this Lido DAO wallet will be able to purchase the coverage on-chain.

Nexus Mutual will list the policy, with the agreed terms and pricing. The DAO will be able to purchase this via our UX with a single transaction, paying in ETH, with coverage denominated in ETH terms. The cover will be for an agreed upon duration, though we will allow you to purchase for as little as 30-day increments, preserving cashflow for the DAO and making it easier to scale the coverage as the module grows.

Once the DAO has purchased on-chain, their wallet will automatically receive an NFT, which represents the policy. Should a claim arise, the same wallet will use this NFT to submit a claim on our website.

Claims:

  • Claim Filing: In case of an incident, the Lido DAO would file a claim in the Nexus Mutual UI, describing the event and providing a proof of loss (e.g. the on-chain evidence that slashing occurred).

  • Claim Assessment: After filing the claim, Nexus Mutual’s claim assessors will vote on the claim. Claim assessors review the incident details, proof of loss, and other supporting information to determine a claim’s validity. Given the on-chain nature of slashing events and penalties, a claim under this policy would be very straightforward to assess.

  • Claim Payout: When a claim has been accepted, a cool-down period of one day needs to pass before the claim payout can be redeemed.

  • Time: The typical time it takes for a claim to be filed, assessed and paid out is 5-7 days.

  • History: Since inception, Nexus Mutual has paid out ~$18M in claims, the largest amount of any on-chain DeFi cover provider. Incidents that led to these claims included projects such as Euler Finance, FTX, Rari Capital, Sherlock, Bancor and Yearn. Because our system is on-chain, all claims are transparent and can be independently verified. Our DAO has created an overview of all claims with detailed descriptions (Nexus Mutual - Claims History)

Trusted Partner:

  • Lido: We have been a long-term partner to Lido, having staked ~30k ETH of our own capital pool since 2021.

  • Slashing Cover: Over the past two years, Nexus Mutual has worked with all major staking operators to understand all the risks, and we have been the preferred slashing cover provider for liquid staking protocols such as Liquid Collective, EtherFi and Stakewise.

What’s covered:

Our policy covers the direct loss of ETH to slashing (i.e. 1 ETH, or greater if correlated), and the penalties that are directly associated with the slashing event. It does not cover penalties that are unrelated to slashing, and it does not cover loss of rewards.

More Information:

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