October 29, 2024
Nexus Mutual is expanding its reach in the crypto insurance landscape by backing Native, a new broker designed for digital asset coverage. With a seed funding round of $2.6 million spearheaded by Nexus Mutual, this collaboration intends to offer on-chain insurance policies with coverage limits reaching $20 million for each risk. Leveraging a capital reserve of about $200 million, mostly in ETH, Nexus Mutual is well-positioned to underwrite several types of coverage from day one, enhancing the availability of insurance options in the industry.
The crypto sector has long experienced a notable insurance capacity gap, with only around 1% of crypto assets currently insured compared to approximately 7% of GDP in traditional insurance markets. Native co-founder and CEO Ben Davis emphasized the importance of addressing this chronic underinsurance issue for the industry's growth. Native aims to connect businesses with Nexus Mutual's capital pools while providing clients with the option to transact in cryptocurrency for both payments and claims. Additionally, Native will function as a managing general agent (MGA) on top of Nexus Mutual, expanding its role beyond distribution to include underwriting.
Since its inception in 2019, Nexus Mutual has underwritten around $5 billion in crypto assets and paid out $18 million in claims, primarily related to decentralized finance (DeFi) risks that conventional insurers may struggle to cover. The protocol allows its members to invest in syndicates, similar to the Lloyd’s of London market, enabling them to receive NXM tokens in return for backing specific risks. This setup offers members the potential for substantial yields, estimated around 25%, albeit with inherent risks. Nexus Mutual founder Hugh Karp emphasized the firm’s in-depth understanding of crypto-native risks and its commitment to fostering a robust insurance market for crypto businesses.
Additionally, Nexus Mutual's insurance offerings have been integrated with popular protocols on Coinbase’s layer 2 network, Base, through a new product called Base DeFi Pass, developed by OpenCover. This solution provides comprehensive coverage across several leading protocols, including Uniswap and Compound, with a straightforward "set and forget" approach for users. OpenCover CEO Jeremiah Smith noted that the Base DeFi Pass covers risks such as smart contract bugs and exploits while excluding certain risks like phishing attacks and market price fluctuations. Jesse Pollak, creator of Base, acknowledged that OpenCover’s product enhances user confidence in engaging with DeFi by providing an additional safety net.
About Native
Native is a dedicated crypto insurance broker aimed at addressing the underinsurance problem within the digital asset space. Backed by Nexus Mutual, Native facilitates connections between businesses and capital pools, offering on-chain insurance solutions. Its innovative approach includes the ability for clients to pay and receive claims in cryptocurrency, enhancing accessibility and liquidity in the insurance market.
Website: https://www.native.inc/
X: @nativeinsurance
About Investor
Nexus Mutual
Nexus Mutual is a decentralized insurance platform that provides coverage for digital asset risks, offering a more adaptable alternative to traditional insurance. Founded in 2019, it has become a significant player in the crypto insurance space, with a capital pool exceeding $200 million. Nexus Mutual allows its members to participate in the insurance process through syndication, receiving NXM tokens for backing various risks.
Location: London, United Kingdom
Website: https://nexusmutual.io/
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