Nexus mutual
Nexus mutual cover, staking and claims
Nexus mutual connects discretionary cover, NXM-backed underwriting and expert-led claim assessment through a member-owned capital pool. Members select a listed risk, amount, period and cover asset, while stakers allocate NXM to pools that make capacity available. If a covered loss occurs, appointed assessors compare the evidence with the product wording. An accepted claim is paid from the Capital Pool, and the underwriting stake linked to that payout can be burned.
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Cover, capacity and claims in one system
Cover wording sets the covered scope, staked NXM supplies capacity and assessment decides claim outcomes.
A cover buyer selects a listing sold under a particular product. That product supplies the wording, exclusions, proof requirements and grace period. The requested amount then draws capacity from one or more staking pools that support the listing. Without enough available capacity, the mutual can't issue the full requested position on the stated terms.
Cover fees enter the Capital Pool, which holds the assets used to pay accepted claims. When a claim is redeemed, NXM allocated to the affected product is burned across the relevant stakers. The claimant receives the cover asset from the pool rather than the burned NXM. This separation connects capital, underwriting and payment without treating a stake as an automatic claim reserve.
Seven participation paths and their boundaries
Each changes a different protocol state and carries its own limit.
| Member action | What the action changes | Boundary or hard limit |
|---|---|---|
| Buy cover | Reserves underwriting capacity and creates a cover NFT | The selected period must run from 28 to 365 days |
| Contribute capital | Adds a supported asset to the Capital Pool and mints NXM | Only members can hold and use NXM inside the protocol |
| Delegate NXM | Lets a staking pool use the stake for capacity and governance | The principal remains locked until its staking period ends |
| Manage a staking pool | Allocates stake across listings and sets target prices | Aggregate product allocation can use no more than 20x leverage |
| File a claim | Starts assessment of a covered loss and requested payment | The request can't exceed the remaining cover amount |
| Vote on governance | Signals or enacts decisions about protocol and capital | One member's voting power is capped at 5% of NXM supply |
| Transfer a position NFT | Moves ownership of cover or a staking position | A non-member may hold it, but membership is required for restricted actions |
Cover starts with wording and available capacity
A cover position begins with a product, a supported listing and enough capacity to issue the requested amount. The wording matters before the quote does.
Wording defines the loss
Each product states what qualifies as a loss, what it excludes and what evidence an assessor needs. It also sets the grace period after expiry and any applicable deductible. A loss involving a listed protocol doesn't qualify merely because the listing name matches. The event, position and evidence must satisfy that product's wording.
The purchase reserves capacity
The buyer chooses an amount, a period and a cover asset. Supported cover denominations include ETH, USDC and cbBTC, while the fee can also be paid with NXM. The amount doesn't have to equal the whole protected position. Because pricing and capacity are calculated onchain, the order includes a slippage preference and can change before confirmation.
The NFT records the position
A completed purchase creates an ERC-721 cover NFT in the buyer's address. Most products also collect proof-of-loss details, such as relevant addresses or positions. That information is held privately offchain and requires a wallet signature to read. It can be corrected while cover is active and during its grace period, but only before a loss event.
How does staking turn NXM into cover capacity?
NXM staking turns token commitments into available cover by letting pool managers allocate delegated stake to selected listings.
Delegated NXM
Staking periods run from 91 to 728 days across eight fixed choices. A staker can't withdraw principal before the selected period ends, although the tokenized staking position may be transferred or sold. Cover purchases generate NXM rewards for the pools that supplied capacity. Those rewards stream over the cover period, don't compound into principal and remain separate from the locked stake.
Pool management
A pool manager chooses which listings to underwrite, how much NXM to allocate and the target price for each risk. Public pools can accept delegated stake, while private pools don't. Delegators choose the pool but don't direct its individual allocations. They can inspect its covered products, management fee and earlier NXM burns before committing their tokens.
Burn exposure
An accepted and redeemed claim can burn NXM allocated to the affected product across the pool's stakers. The calculation uses the reserved capacity established when cover was purchased and the applicable capacity factor. A burn may consume part or all of an exposed staking position. Rewards compensate stakers for accepting this possibility, but they don't place a ceiling on the loss.
Prices move with underwriting demand
A cover quote combines the chosen amount and period with prices from pools that still have capacity for the listing.
Most public listings use dynamic pricing. A purchase consumes capacity and raises the price used for the next purchase, while periods without demand let it move back toward the pool manager's target. Select public listings and private listings use fixed pricing subject to a floor set by the Advisory Board. A limit order can wait for a chosen maximum price, but it executes only when that condition and the available capacity coincide.
The quoted fee is therefore an input-driven amount rather than a permanent rate. Utilization, pool allocation, the requested period and onchain execution conditions can all change the final transaction. The maximum premium derived from the buyer's slippage preference determines whether the purchase can still execute on the accepted terms.
Claims now use expert assessment
A claim moves from evidence to a recorded vote, a cooldown and a limited redemption window.
Evidence and filing
The claimant must hold the cover and be a member. The submission identifies the incident, requested amount and proof connecting the loss to the protected position. Filing requires a 0.05 ETH deposit. Product wording determines whether the loss qualifies, whether a deductible applies and whether the claim still falls within the applicable grace period.
Committee decision
Since November 2025, a Claims Committee has replaced member staking for claim decisions. A claim opens a 72-hour voting window that can close once every assessor has voted; governance can extend it with a fresh 72-hour window. For the current three-person Claims Committee, two accept votes form a majority. Some products name a separate Designated Claim Assessor in their wording. Current product settings use a 24-hour cooldown after voting before the outcome becomes final.
Payment or denial
Under current product settings, a claimant has 30 days after the cooldown to redeem an accepted payout in the cover asset. The Capital Pool sends the payout, and the corresponding underwriting burn takes place in the pools that supplied capacity. A denied claim produces no payout. The assessors' recorded reasoning shows why the submitted event or evidence didn't satisfy the wording.
NXM connects capital, rewards and governance
NXM gives members access to underwriting and governance while linking token value to assets held in the Capital Pool. Capital contributions can mint NXM, and the protocol's Ratcheting Automated Market Maker supports swaps between NXM and ETH. A swap remains subject to its quoted output, slippage limit and transaction deadline.
Delegating NXM also delegates its governance power to the staking pool manager. Claim assessment is separate, so a staker or manager doesn't gain a claim vote from that delegation. Governance covers protocol changes and Capital Pool decisions, while the Claims Committee applies existing cover wording to individual submissions.
Membership and private loss records
Membership controls access to NXM, direct cover purchases, staking, governance and claim filing. Joining requires identity verification under Know Your Customer and Anti-Money Laundering checks and jurisdictional eligibility; the current membership fee is 0.0020 ETH. Proof-of-loss records remain offchain and private, with wallet signatures controlling access. Privacy doesn't repair an omitted address or position after a loss has occurred.
Reconciliation and exit states
Cover reaches its normal end when the selected period expires. The associated capacity becomes available again after the reservation ends. A grace period may still permit a claim for an event that occurred during active cover, but it doesn't extend protection to a later event.
An accepted claim isn't complete at the vote. The claimant must wait through the cooldown and redeem within the allowed window. Completion appears when the cover asset reaches the receiving address and the claim records the payout as redeemed.
A staking position matures at the end of its fixed period. The owner can then withdraw remaining principal, including any amount left after burns. Accrued rewards follow their own withdrawal path and don't shorten the principal lock.
An NXM exit uses the available RAMM quote rather than a guaranteed redemption value. The transaction must satisfy its minimum output and deadline. A submitted swap that expires or breaches the slippage bound leaves the intended exchange incomplete.
Every path ends with an observable state change. Until the wallet or protocol record shows the cover NFT, redeemed payout, withdrawn stake or swap output, the corresponding action remains unfinished.
Nexus mutual - your questions answered
Can someone purchase cover before joining the mutual?
Yes, certain point-of-sale integrations can issue cover before the buyer becomes a member. The holder must still join the mutual, pass its identity and eligibility checks and pay the membership fee before filing a claim. A cover NFT in a non-member address doesn't remove those claim requirements.
Which wallet addresses may a cover protect?
A member can protect eligible crypto that they manage in addresses other than the registered membership address. The required addresses or positions must be recorded in the cover's proof-of-loss information. Cover can't be bought for another person's assets, and a loss tied only to an omitted address may fall outside the recorded position.
Why can't wNXM be used for staking or governance?
Protocol staking and governance require NXM held through a membership address. wNXM is a transferable ERC-20 wrapper that represents NXM one to one, but it doesn't carry NXM's member-only protocol functions. A member must unwrap wNXM back to NXM before using those functions.
What follows a denied claim decision?
A denied claim produces no payout and the 0.05 ETH claim deposit isn't returned. The member can review the assessors' reasoning and submit another claim with stronger or missing evidence. The new submission needs its own 0.05 ETH deposit and must still connect the loss, covered position and requested amount to the applicable wording.
Does an accepted partial claim remove the remaining cover?
No, redeeming an accepted partial claim reduces the covered amount but doesn't automatically end the position. The unused amount remains active until the existing cover period expires and may respond to another qualifying loss. Any later claim still has to meet the same wording, evidence requirements and remaining amount.
When are staking rewards available while principal remains locked?
NXM rewards stream to the tokenized staking position over the relevant cover periods and a member can withdraw accrued rewards before the principal unlocks. The principal itself remains unavailable until the selected staking period ends, and the rewards don't compound into that locked amount.