Coindesk, Ehtereum-based Nexus Mutual has extended its decentralized “insurance” to centralized exchanges, including Binance, Coinbase, Gemini and Kraken. Nexus Mutual provides a decentralized alternative to insurance, and until now was primarily focused decentralized exchanges (DEXs) and decentralized finance (DeFi).As reported by
Both decentralized and centralized exchanges are susceptible to hacks and losses and the typical insurance cover is exorbitant and uncommon.
Nexus has selected a different path, and is offering personal coverage to users themselves rather than relying on the insurance policy offered by the exchange. By employing the U.K.’s legal framework for a discretionary mutual, members have no contractual obligations for the payment of associated claims. This policy is then applied to a group of digital NXM token holders and the Ethereum public blockchain is used to track governance and proportional owner ship of the fund.
By offering this insurance option, Nexus users can get covered independently of the exchange, offering a solution to the current limited-capacity conundrum. If an exchange gets hacked or the user loses more than 10% of their funds, Nexus will pay a claim through their centralized exchange cover. When cover is purchased, Nexus members are able perform various roles such as assessing claims by voting or assess risks by staking tokens against certain risks.
Nexus Mutual also offers insurance coverage to users of Celsius, BlockFi, Ledn, and other custodians.