Nexus Mutual is known for being one of the first & most established providers of smart contract cover in the crypto space, today they are pushing boundaries again by providing a new type of insurance cover called “Custody Cover”.
Users can purchase “Custody Cover” on the 6 centralized custodians listed in the tweet below.
Custody Cover is now live
Contracts are live and open for staking so that users of centralised exchanges and custodians can purchase custody cover.
— Nexus Mutual (@NexusMutual) December 2, 2020
The Nexus team explains that custody cover will protect users in the event that a custodian gets hacked and the user loses more than 10% of deposited funds or if withdrawals are stuck for more than 90 days. At the time of writing, there have already been some NXM mutual members that have chosen to stake on these custodians so there is cover available, should you be interested in purchasing.
Now users of centralized exchanges and custodians can also purchase custody cover directly from Nexus Mutual, this new “Custody Cover” product is the first product that comes out of Nexus Mutual that extends beyond smart contract cover. While this may not seem like big news to an avid DeFi user, custody cover is actually much needed as none of the 6 listed custodians besides maybe Nexo offers any sort of assurances on deposits.
Just earlier this year, we saw a centralized crypto bank in Cred go belly up and ultimately the depositors were left hanging, unable to withdraw their funds for an extended period of time and faced with tons of uncertainty. Nexus custody cover would have been extremely helpful here.
Staking on these centralized custodians works the same as staking on DeFi Protocols listed on Nexus Mutual. NXM stakers will gain rewards for staking and 50% of any purchased cover is divided proportionally between the stakers.
As a community based mutual, Nexus always relies on member voting to decide on claims, the cover wording document serves as a guide for mutual members as they vote on claims.
Keep up with Nexus Mutual by following their Twitter.