Insurance Alternative Nexus Mutual Follows DeFi Activity to Polkadot, Cosmos, Binance Smart Chain

The Ethereum-based platform for covering losses from DeFi hacks and other flubs is expanding to other chains.

AccessTimeIconApr 26, 2021 at 8:00 a.m. UTC
Updated Sep 14, 2021 at 12:46 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Nexus Mutual, a community-backed alternative to traditional insurance where a yield-bearing pool of funds locked on a blockchain pays for claims, is expanding its coverage beyond Ethereum, the original locus of decentralized finance (DeFi). 

Announced Monday, Nexus is meeting DeFi’s growing demand with “Protocol Cover,” which means the decentralized mutual will now cover mishaps on other popular smart-contract networks such as Polkadot, Cosmos and Binance Smart Chain (BSC). 

Nexus is also expanding its repertoire of insurable events beyond smart-contract hacks to include attacks on oracles, the vital data feeds that trigger contracts, as well as things like governance failings, the company said. 

All told, the Nexus expansion is an interesting sign of DeFi’s growth – both on Ethereum and competing networks.

The Nexus expansion plan is blockchain-agnostic, so to speak, but lists particular projects. So SushiSwap, for example, runs on a few blockchains and those instances will all be covered by the mutual.

“We will add particular protocols as they come up,” Nexus CEO Hugh Karp said in an interview. “Some of them will already run on multiple chains, and so we'll upgrade so that if a project is running on Polkadot or Cosmos or Binance Smart Chain then we can start covering that.” 

Nexus uses the U.K.’s legal framework of a discretionary mutual, where members have no contractual obligations to pay claims. Instead, a pool of NXM token holders on the Ethereum blockchain stake assets against the likelihood of insurance claims, and earn rewards or make payments in the event a claim is approved.

“The DeFi space has massively expanded creating new risks, and we’ve updated the product to expand the coverage to suit everyone,” Karp said. “Compared to the regular insurance industry, DeFi has these fast feedback loops and cycles where everyone learns from experiments really quickly and then adjusts. It’s incredibly powerful.”

Growth at Nexus has tracked the explosion in the DeFi space over the past 12 months or so. The active cover being provided by the mutual currently stands at about $700 million while the size of the staking pool (which fluctuates with the price of NXM) stands at about $1 billion.

“I think lots of institutional capital is starting to enter the space or at least exploring it. This [insurance alternative] is one of those key tick boxes,” Karp said. “We're getting some strong interest from that side of things.”


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; 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.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.