DeFi Insurer Nexus Mutual Raises $2.7M in NXM Token Sale

The firm aims to sell over $1 billion worth of cover in 2021 spread across at least 30 protocols.

AccessTimeIconFeb 16, 2021 at 2:00 p.m. UTC
Updated May 9, 2023 at 3:15 a.m. UTC

Decentralized insurance alternative Nexus Mutual received a $2.7 million boost to its foundation treasury, the not-for-profit umbrella organization charged with selling NXM tokens to fund core development of the protocol.

The strategic contribution was led by Collider Ventures with participation from Nick Tomaino’s 1confirmation, Blockchain Capital, Version One, Dialectic, 1kx and several angel investors.

  • Bitcoin ETFs Are Still 'Wildly Successful': Kraken Head of Strategy
    11:52
    Bitcoin ETFs Are Still 'Wildly Successful': Kraken Head of Strategy
  • Bitcoin ETFs Are Still 'Wildly Successful': Kraken Head of Strategy
    11:52
    Bitcoin ETFs Are Still 'Wildly Successful': Kraken Head of Strategy
  • Wormhole’s W Token Has a 999% Weekly Return; Why VanEck Is Bullish on Ethereum Layer 2s
    02:30
    Wormhole’s W Token Has a 999% Weekly Return; Why VanEck Is Bullish on Ethereum Layer 2s
  • NEAR Launches Multichain Access
    15:12
    NEAR Launches Multichain Access
  • Nexus started out focused on providing protection against risk and potential bugs in the smart contract code of decentralized finance (DeFi) projects. Recently, the startup announced it was extending its community-based offering to cover users for hacks and losses incurred at centralized exchanges like Coinbase, Binance, Kraken and Gemini.

    The Nexus foundation previously raised $1.4 million from an NXM token issuance in 2018, bringing the total raised to date to $4.1 million. 

    When the early token sales took place, NXM was acquired by investors at around $2 per token. Since then DeFi has grown so rapidly with over $40 billion locked up in projects; NXM is currently trading at around $68, according to CoinGecko

    How NXM works

    NXM is the governance token for the Nexus Mutual protocol. It is used to buy cover, vote on governance decisions and participate in risk and claims assessments. It is also used to encourage capital provision and represents ownership to the mutual’s capital.

    “When Nexus launched, it granted a bunch of NXM tokens to our foundation, which has gradually sold them to cover operational costs,” Nexus Mutual CEO Hugh Karp said in an interview. “We expect to wind down the foundation as the protocol becomes more stable and fully decentralized.”

    Karp said the $2.7 million token sale took place around December of last year, at the market value for NXM at that time, without stating the exact figure.

    It has been a momentous year for Nexus. The platform saw its pool of capital covering risks within the DeFi ecosystem increase from $4 million to $100 million within the final five months of 2020. 

    Nexus Mutual has a very aggressive roadmap for 2021, Karp said, aiming to sell over $1 billion worth of cover spread across at least 30 protocols.  

    “We see Nexus Mutual as an indispensable pillar of DeFi … and decided to take a proactive approach to support the development of the platform,” Adam Benayoun, founding partner of Collider Ventures, said in a statement.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.