Decentralized protocol Nexus Mutual, which offers insurance coverage for DeFi users, is expanding its product and service offering to bring protection to centralized cryptocurrency exchanges.
Nexus mutual is betting big on the new crypto-economy industry, with its innovative insurance services and hedging policies. The decentralized finance protocol (DeFi) announced that it will expand the range of coverage products and services up to exchanges centralized, also known as CEX, so that users can have protection in case they suffer a hack, or any other type of inconvenience.
According to its statement on Twitter, Nexus Mutual will offer coverage plans, for users who so wish, against hacks to trading and exchange platforms. cryptocurrencies, centralized, where users lose more than 10% of their funds during a cyberattack; or if the exchange stops withdrawals for a period of more than 90 days.
Custody coverage, as Nexus Mutual calls it, is focused on protecting and ensuring the integrity of user funds deposited in exchanges and centralized custodians, such as exchanges, who maintain the responsibility of custody of the private keys of cryptocurrency funds and assets on behalf of users.
It may interest you: Hacker prints 40 trillion tokens using Cover protocol exploit and then burns them
Protection outside the DeFi market
For the company, this is just the beginning of a series of innovative products that will ensure Nexus Mutual's future success as a hedging marketplace for the various risks that exist both in the crypto space and beyond. According to the release which the company recently published, this is the first step in Nexus Mutual's construction of this path, where it will use all the benefits of technology blockchain to protect all communities in the industry.
“We are building Nexus Mutual for the long term, which means Smart Contract Cover is not the end goal, but just the beginning.”
The company has a hedging product for DeFi projects, called Smart Contract Cover, which focuses on providing protection to users against bugs and exploits that may occur within smart contracts running in the decentralized ecosystem.
A growing need, but too expensive
Hedging products like those offered by Nexus are of particular interest and importance today, due to the rise of hacks and vulnerability exploits that have affected numerous DeFi projects, putting the funds of innocent users and investors at risk. Likewise, the total value locked (TVL) in DeFi these days exceeds $20.000 billion, as shown by DeFiPulse, another indication that justifies the existence and need for coverage products like this.
Source: DeFi Pulse
Analysts believe that the increased interest and value placed by users and investors in decentralized ecosystems, which are just growing and developing, will drive the emergence of insurance and coverage products and services, as well as the companies that offer them, in the coming months.
Custody coverage is the second product announced by Nexus Mutual against the risks associated with the cryptocurrency and digital finance ecosystem. To use this service, users who wish to acquire the coverage must complete a KYC (Know Your Customer) registration quite detailed within the company; in addition to paying an annual fee that can be quite expensive; ascending from 2% to 30% of the funds, depending on the amount of cryptocurrency or digital assets you want to protect and the exchange or custodial service provider that handles them. It is clear that, in some cases, this is a luxury that not many ordinary users, and retail investors, can afford.
Continue reading: Chainlink Oracles Can Help DeFi Avoid Flash Loan Attacks, Warp Finance Says
