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Cover analysis · Nexus Mutual

The safety net,
dissected.

In plain words

Nexus Mutual is the largest on-chain cover provider: a member mutual that pays on hacks, but at its own discretion, there is no legally enforceable claim.

Nexus Mutual is the largest on-chain cover provider for crypto. This profile combines live on-chain data with a sourced analysis of what is actually covered, who decides on claims, and which risks the buyer keeps. Facts, not advice.

How the mutual works

Nexus Mutual is insurance without an insurer: three roles share one common capital pool. Pick a product, choose a case and click through, step by step.

Example Alice has $100,000 in Uniswap v3. She wants to hedge against a hack of the contracts.
Buyer

Alice. Has money in the protocol, pays a premium, gets reimbursed if a covered loss hits.

Investors

NXM holders (risk capital providers) who put their stake on Uniswap v3 through a pool manager. In essence investors underwriting risk for yield, like reinsurance capital: their stake IS the capacity, they earn premium rewards and are first in line for losses.

Capital pool

Shared vault (ETH, stablecoins). Receives every fee, pays the claims. Shared across ALL products.

investorsrisk capital provider+NXM mintedcapital pool stays fullAlicebuyerStaking poolcapacity for this listingCapital poolbacks all covers
investorsrisk capital providercapital pool stays full+NXM mintedAlicebuyerCapital poolbacks all coversStaking poolcapacity for this listing

Three participants: Alice buys the cover, the staking pool provides capital from investors (risk capital providers), the capital pool backs every policy.

NXM supply, live: minting grows it, claim burns and member redemptions shrink it 1.69M NXM
2026-04-17: claim paid (Blue Chip Morpho Vaults & Markets), $3k

8 paid claims in this window (red = NXM burned). Hover a dot for details.

Burn rate, paid claims 29 NXM

over 241 tracked days

Mint rate, from premiums 655 NXM

derived: supply change + burn, same day

How the premium is formed

cover × annual price × term: $100,000 × 0.28% × 90/365 ≈ $70

The annual price is the market price of this listing. The pool manager sets a target price, the Advisory Board the starting price. Every purchase bumps the price up (0.2 percentage points per 1% of pool capacity used); without purchases it falls back 2 percentage points per day toward the target. High demand makes cover more expensive automatically, quiet times make it cheaper.

Of every premium, 50% is minted as fresh NXM for the staking pool (the manager fee comes off first, the rest streams to the investors over the cover period) and 50% flows into the capital pool that backs all covers. Technically the paid fee goes into the capital pool in full and the investors half is newly minted NXM; the 50/50 split is the economic summary the Nexus docs themselves use.

The catch

The payout is discretionary, not a legally enforceable claim, so the assessors can decline. And only specific events like an exploit are covered. The classic LP loss (impermanent loss) or a depeg are NOT covered.

Who this is for: DeFi users who want to cover their own positions (and teams via the builder products)

Transparent, battle-tested, well capitalised relative to active cover. The structural weakness is legal: payout is a discretionary member decision, not an enforceable claim.

Data confidence: medium · Assessment as of 2026-07-14 · Methodology: Raccoon Score

How to read this page: where each value comes from

On-chain Read from contracts, verifiable by anyone at any time.
Contract doc From a binding written document, off-chain but checkable.
Provider claim Stated by the provider, off-chain: a matter of trust.
Third party From a third-party source, off-chain: a matter of trust.
Our assessment Our judgement under the Raccoon methodology.

Only on-chain values are verifiable without trusting anyone. Everything off-chain, including binding documents, ultimately relies on trust in the source.

Live on-chain On-chain

Reading the chain…

Profile

Provider Nexus Mutual (DAO, discretionary mutual) Provider claim
Live since 30 May 2019, Ethereum mainnet Provider claim
Product analysed Single Protocol Cover (current cover terms) Our assessment
Legal nature Discretionary cover: payout is a member decision, not a legal obligation Contract doc
Recovery entity Terrapin International Foundation (per cover terms) Contract doc
Membership KYC plus membership fee required, sanctioned jurisdictions excluded Contract doc
Token NXM: members only, not listed on exchanges, redeemable for ETH in-app Provider claim

The key legal point: Nexus Mutual states explicitly that cover is not a contract of insurance. Members vote on claims; the mutual has discretion, not an obligation, to pay. The $18.5M claims record is real, but it is a track record, not a legal right.

Analysis as of 2026-07-14. Live figures update every 5 minutes from the contracts. Not affiliated with Nexus Mutual. Informational only, no legal, investment or insurance advice.

COVERRACCOON

Independent analysis of DeFi cover. We read the terms nobody else opens.