About the Nexus Mutual Protocol Improvement Proposals category

Governance Discussions Nexus Mutual Protocol Improvement Proposals
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Nexus Mutual is an onchain discretionary mutual governed by its members. The Mutual uses an optimistic governance model where the Advisory Board (AB) creates a proposal and sets the default outcome.

The AB creates a proposal in parallel on the Nexus Mutual DAO Snapshot space, where Nexus Mutual members can vote to reject the default outcome. If Nexus Mutual members vote and meet the quorum for rejection, the AB’s default outcome is rejected and the proposal does not move forward.

About NMPIPs

A Nexus Mutual Protocol Improvement Proposal (NMPIP) is a proposal to signal or enact a change to the Nexus Mutual protocol. These proposals are used to engage with the community, reach consensus, and enact proposals if approved through a vote.

Members can post and discuss proposals on the Nexus Mutual governance forum. All proposals need to follow the guidelines outlined in the Nexus Mutual Protocol Improvement Proposal (NMPIP) framework below.

Once an NMPIP has gone through the discussion process, it will be put to a vote on the Nexus Mutual DAO Snapshot space. All Nexus Mutual members can vote and enjoy gas-less voting on Snapshot.

The default outcome will be approve unless Nexus Mutual members vote to deny and meet quorum.

Replacing Advisory Board Members

Ultimately, Advisory Board (AB) members serve at the discretion of Nexus Mutual members. Should members decide an AB member needs to be replaced, Nexus Mutual members can raise a proposal onchain to replace an AB member without interference from existing AB members.

Any Nexus Mutual member can raise a proposal to raise an AB member, with the following requirements:

  • The member who raises the proposal must have a minimum of 100 NXM tokens in order to put the proposal onchain; and
  • At least 15% of the total NXM token supply must participate in the vote.

If a proposal to replace an AB member receives a majority of the votes to approve and quorum is met, the proposal will pass.

Capital Pool Investments

Nexus Mutual invests the idle assets held in the Capital Pool at the discretion of its members. Any potential investment of Capital Pool funds must first go through the NMPIP process before a vote on an investment allocation can be made.

Anyone interested in putting forward a proposal to allocate a portion of Nexus Mutual’s Capital Pool to an investment must follow the Investment Proposal Template that was developed by the Investment Committee.

For examples of past investment allocations, see the Investments section of the Nexus Mutual documentation.

Voting Power

Every member who joins Nexus Mutual has voting power equal to one vote plus the sum total of their NXM tokens.

Quorum for Rejection

To defeat a proposal, members must vote with at least 15% of the NXM token supply to deny the default outcome recommended by the AB.

NMPIP Governance Process

Step 1: Post a Request for Comment (RFC)

Every governance discussion should start as a Request for Comment (RFC) to get feedback from the community and, if applicable, the engineering team.

RFCs should be posted for a minimum of 7 days before they are raised as formal NMPIPs. The feedback you receive can be used to revise your proposal ahead of a NMPIP posting.

RFC format

  • Title. NMPIP: [Concise title for proposal]. For example: NMPIP: Invest some of the mutuals funds in LIDO stETH

  • Summary. Short summary, no more than 250 words, of your proposal.

  • Rationale. Explain why your proposal is important: what problem does it solve?

  • Specification. The what and how of your proposal. What is the purpose of your proposal and how does it solve the stated problem, benefit members, or improve the protocol?

  • Technical requirements. Outline any development resources and requirements necessary for your proposal to be implemented.

  • Proposal status. Depending on what stage your proposal is in, you must include:

    • Stage. One of the following should be added: 1) Open for Comment, 2) Closed, 3) Open for voting, 4) Accepted, or 5) Rejected.
      • If you choose to conduct a signaling vote using Snapshot, please update status to Signaling Vote and link to that vote. Signaling votes can be used but are not required.
    • If it is in the open for vote stage, add the link to the on-chain proposal

Other sections may be added, but the above should be outlined in any proposal.

Step 2: Post an NMPIP

If your RFC has been active on the forum for at least 7 days and you receive support, your proposal can move to the NMPIP stage. Any feedback you receive during the RFC stage needs to be incorporated before your proposal moves to the NMPIP stage.

An NMPIP should be open for final review and comment for at least 7 days before requesting to have your proposal whitelisted by the Advisory Board.

NMPPs can be in the open for comment stage for longer periods of time, but there is a minimum to ensure review, feedback, and discussion can occur before the proposal is reviewed by the Advisory Board.

Step 3: NMPIP Vote

With the exception of votes to replace AB members, NMPIPs need to be posted by an Advisory Board member on the Nexus Mutual DAO Snapshot space. Once you are ready to move your NMPIP to a formal vote, please reach out to BraveNewDeFi, who can coordinate with the Advisory Board members to get the vote live on Snapshot.

Timeframes for Votes

When governance proposals go to vote, there is a standard timeframe for the voting period:

  1. Proposal is created. The vote is put onchain and on the Nexus Mutual DAO Snapshot space for voting.
  2. Proposal is open for voting. All governance proposals have a three (3) day voting period.
  3. Post-vote timelock period. Once the voting period closes, a proposal is subject to a 24-hour timelock period where no action can take place until the timelock period passes.
  4. Proposal outcome. If a proposal succeeds, it can be executed after the timelock period ends. If a proposal is defeated, no action is taken after the timelock period ends.

For NMPIPs, the default outcome will be approve unless Nexus Mutual members vote to deny and meet quorum (15% of the NXM token supply).

For more information on Nexus Mutual’s governance process, see the Governance page in our documentation.

If you have any questions, please reach out to us through the Nexus Mutual contact form on our website.