From the Discord discussion with @BraveNewDeFi, I wanted to open up a forum for discussion on building a process for more actively onboarding/ listing new protocols and offering covers.
Based on my understanding, for an unlisted protocol to get on Nexus Mutual, project team needs to fill out an application form (Application to be listed on Nexus Mutual: Protocol Cover), and the process evolves from hereon.
However, rather than waiting for unlisted protocols to come to the mutual with an application, what if we screened unlisted protocols ourselves and more actively engage in attempt to get them onboard on the mutual for protocol covers?
As @BraveNewDeFi pointed out in the Discord chat, there are 2 main criteria that we should consider when listing a new protocol:
A) Is there demand for cover?
B) Will Risk Assessors stake against this protocol/custodian/yield token cover product?
Let’s consider about each criteria.
Demand for cover – Unless it’s a blatantly popular protocol that many users are using, often it’s hard to judge what the demand will be for a particular protocol’s cover. So one way of simplified thinking is to consider TVL, as likely positive correlation between TVL and demand to protect their capital. If we decide to use TVL as a measurement, then we could screen for protocols with $x mm TVL or more to vet a target group that we can actively work with.
Appetite for Risk Assessors to stake against the protocol – One way to quantify the rough demand for staking is to run a soft poll on Discord, and the poll can run for a day or two to check the demand from Risk Assessor side. If there is enough ‘Yes’, then we go ahead and try to list the protocol.
The big picture reasoning for taking more active approach in adding unlisted protocol is for the mutual to expand the range of protocol cover offerings and build the momentum for growth on Active Covers underwritten. As part of this effort, building a simple process where we can quantify difficult judgement factors like ‘demand’ would be beneficial and deliver more clarity.
Would like to hear what others think about this potential initiative.