Nexus Mutual is an open platform on Ethereum that lets members pool and share risk through a discretionary mutual (a community-owned insurance alternative). Only members can participate in the network, buy cover, and hold NXM (the platform's native token). But anyone can become a member by paying a nominal fee in ETH. The mutual is fully member-owned, and members are entitled to a share of any capital held in excess of what's necessary to pay potential claims.
Two months after its May 2019 launch, Nexus Mutual rolled out its first product, Smart Contract Cover, which lets members buy protection against financial loss caused by another's misuse of a smart contract. Cover is customizable: buyers choose a smart contract (any Etherscan-verified contract is eligible; for complex dApps, coverage extends to directly-related contracts) and coverage duration and amount (in ETH). Cover is priced in NXM, but the platform allows payment in ETH or Dai, which it exchanges for NXM.
NXM is also used for governance and incentivization of honest risk- and claim-assessment. For risk assessment, members can stake NXM to show confidence in a particular smart contract's security. Stakers get rewards if cover is bought for that contract, but if the contract is deemed unsafe, the stake may be slashed. For claims assessment, members earn rewards by staking NXM in support of a legitimate claim; for fraudulent claims, stakers are penalized.
How to use Nexus Mutual?
To get started, head to [app.nexusmutual.io, https://app.nexusmutual.io], where you can become a member and connect your Ethereum address to your account by passing some light KYC. Then you can buy NXM, buy and manage cover, or take part in governance and risk- and claims-assessment.