Financial Advisor DeFi Toolkit

[adam]

What is the project

We are building an all-encompassing framework and toolkit which will enable financial advisors to offer Decentralized Finance advice and guidance to their clients in a compliant and safe manner. The toolkit will include:

• Education requirements for DeFi, and for the tech stack we choose
• Compliance and regulatory documentation for the advisor to file with the regulators, and have prepared in the event of an audit.
• Sample agreements to use with clients
• Tech stack including social recovery wallet, accepted protocols, smart contract cover
• Error and Omissions insurance covering the DeFi advice and funds

How will it bring value to the mutual?

Every client of an advisor utilizing the toolkit would have to purchase Nexus Mutual smart contract cover for the wallet, and for any protocols being utilized. We would, therefore, be adding distribution and education, and setting up for the possibility of adding commissions and brokerage.

In addition, we would look to add Nexus Mutual as somewhat of re-insurance, and as a protocol for our Errors and Omissions coverage.

Overall, while we realize this isn’t the typical project seeking treasury funds, we are looking to build a long-term partnership that will onboard so many financial advisors and investors into DeFi with the requirement to use Nexus Mutual smart contract cover.

What problem are you solving?

Currently investors who use a financial advisor are not able to utilize DeFi and have it be a part of their financial plan. This is because financial advisors assume they cannot offer DeFi to their clients for compliance purposes. We are going to create a compliant framework, including tech, education, and insurance, allowing advisors to go straight to DeFi for clients.

Which of the three elements does this project seek to develop and what score from the impact matrix would you give it (eg, Impact 3, Effort 3)? Details:

We hit 2 of the matrix elements.

1. Awareness/education - Impact 4, Effort 4 - we are educating financial advisors, who will educate their clients. The effort is partly in getting attorneys to help draft letters, agreements, and guidance for advisors, for us to create the entire education and process, and to build the E&O insurance product the advisors need.
2. Distribution/sales - Impact 5, Effort 4 - we are forcing advisors to purchase Nexus smart contract cover if they want to be covered by the E&O insurance we create. Again, the effort is in creating the education as to how it works, how to purchase, and why they need it.

**What support would you need from the Nexus team? Please include any resources you would require (except for financial). ***

We would need the team to provide some of the education you have or are currently building, as well as some guidance as to the cover we will need based on the protocol stack chosen.

We will also require help from the Nexus Mutual team in building the E&O protocol and reinsurance pool.

How much time will it take you to complete the project? Please include how many hours/days you will work on the project and your expected delivery timeframe

We look to complete this project within 90 days. We are somewhat at the mercy of attorneys to complete much of the legal work. However, since most of the work on our end is not coding, but in building educational material and frameworks, we can do much of the work in parallel.

What’s the budget in USD?

The budget for the project is $125,000. We’re asking Nexus Mutual for 1,000 NXM tokens payable in 3 installments.

The first installment of 250 NXM will be to get the attorneys started on their work of legal opinion on allowable custodial solutions and investment options. We will require some of their initial thoughts to work through tech stack, insurance and education, and the attorneys require a retainer to start work.

Upon completion of the technology stack and protocol outline, based on the attorney recommendations and opinions, we will submit to Nexus Mutual, and request installment 2 of 350 NXM. This installment will again be for attorneys to draft recommended language to amend SEC and State disclosures and client agreements. At this time we can also start on Errors & Omissions insurance design.

Upon completion of the entire project, we will submit to Nexus Mutual, and request the remaining balance of 400 NXM.

Please tell us about yourself. Include name, contact information, how you heard about and got involved with Nexus.

Steve Larsen, CPA, CFP®

Steve is a financial planner and digital asset consultant to Registered Investment Advisers. As a Certified Public Accountant, Certified Financial Planner, and owner of a 200-million-dollar wealth management firm, he has deep experience in all areas of RIA operations.

Steve also teaches financial planning and cryptocurrency classes at Gonzaga University, is a co-founder of the Certified Digital Asset Advisor (CDAA) designation, and is the Founder of PlannerDAO, a decentralized community of financial advisors.

Adam Blumberg, CFP®

Adam has been in Financial Services for over 12 years operating his own Registered Investment Adviser and providing financial planning services to small business owners. He developed the Certified Digital Asset Advisor (CDAA) designation and curriculum and is the Co-Founder of PlannerDAO.

Adam is also the Founder of Interaxis, a company dedicated to educating financial professionals about digital assets, cryptocurrency, blockchain, and other alternative assets. The Interaxis YouTube channel has over 5,800 subscribers, and he has produced video lessons for several of the top cryptocurrency exchanges.

We’ve both been NXM holders and users for over a year. Adam was fortunate enough to participate in one of the very first (if not the first) community vote.

[jer979]

Adam,

Thanks for posting and putting the time into this proposal. Appreciate the effort to help the Mutual.

I understand that you hope/intend to use Financial Advisors to distribute DeFi/NXM to their clients, however, how do you hope to get this framework in front of advisors? Which advisors? Which firms?

Is there a marketing plan for the framework or you are just building the framework?

My concern is that the payback period on this will be really long timeframe and that our efforts, in the near term, are best suited on capturing more market share from among existing DeFi users.

Thanks.

[larseny]

Hello jer979, I am the other sponsor of this proposal. Thank you for taking the time to read through our plan and present excellent questions.

Adam and I actively consult with US investment firms of all sizes, and the single biggest obstacle to bringing our clients into DeFi is the lack of insurance solutions. By building this toolkit, we can solidify which DeFi custody/trading/lending solutions are compliant with US regulations, and then build a Nexus insurance pool that will align with our compliance responsibilities.

For distribution, we launched the PlannerDAO less than three months ago and are over 150 members. We have a very engaged community that is growing rapidly, and they are hungry for this solution.

A good example might be my own firm, where we manage $200 million in assets for approximately 1,000 clients. I currently open client accounts at Gemini and manage them using a piece of trading software called Blockchange. I am forced to use these centralized solutions because I can insure them, but I would prefer to bring my clients directly on-chain.

Once we create this toolkit I will be able to introduce over 1,000 people and millions in assets to DeFi, all of which will need to be insured by Nexus. My firm is on the smaller end of what is considered a mid-size firm, the potential in the US Registered Investment Adviser (RIA) market is enormous. Also, this would provide the roadmap for other countries and regulatory jurisdictions to go on-chain as well.

As Degen owner of a mid-size firm, I am desperate for someone to develop this solution before Schwab, Fidelity, and god knows who else swoops in and builds the same old TradFi and slaps a DeFi label on it (Binance anyone?)

If this community can help us stay on offense against TradFi, the result will be a DeFi distribution system that has leverage (the average advisory firm manages $341 million) and requires that every single dollar moved on-chain is insured by Nexus.

Please let us know if we can clarify any of the above points, we are excited to get started.
Thank you for your time.
Steve Larsen

[adam]

Hi Jer,

I know Steve just responded, but allow me to add a few items, specific to distribution.

We do not have a marketing budget specifically for this. As Steve mentioned, we have created the PlannerDAO, and intend to hand this toolkit to the DAO when we finish. Any DAO member will be able to use this toolkit, including all our education, etc.

We intend to allow the DAO to manage the toolkit - determining which protocols get in next, and creating the education necessary.

We also created the Certified Digital Asset Advisor designation and course, which has seen 86 advisors complete the course since March of this year, with another 20 signed up for the next cohort. We’re decentralizing the designation, opening it up to additional education providers, which will bring in hundreds more advisors to the DAO.

We are creating the market of advisors by educating them about Crypto and DeFi, forcing them into the DAO (that’s where we have the CDAA discussion group), and then offering them the ability to get their clients into DeFi with no additional cost.

There isn’t a direct marketing budget, but we’re building the market through CDAA and PlannerDAO.

[Hugh]

Thanks for the proposal @adam @larseny !

I’ve been speaking to Adam and Steve behind the scenes on this one.

Nexus needs to build out a diverse distribution network like all insurance companies do. Distribution can come in many forms, at one end of the spectrum there are bundled products using DeFi composibility (covered vaults, covered yield bearing tokens etc) and at the other end there are advice networks where users access coverage after talking to Financial Planners. Many people will still prefer to talk to people before making decisions with their money.

I’ve been contracted by many brokers and financial advisers looking to distribute Nexus products in return for commissions but this is the first proposal that is well thought through (especially from a compliance perspective) and also comes with an existing client base.

The proposal is also thoughtfully staged payment wise to ensure we only pay for delivery and the budgeting is reasonable as well.

If successful this will result in an Customised Errors & Omissions product that PlannerDAO would buy on behalf of all it’s planners, plus coverage on key protocols for every customer that the Financial Advisors recommend allocating to DeFi. This would mean ongoing, repeat covers buys on core protocols with an expectation of high growth as more customers are on-boarded.

Strong support from me.

[BraveNewDeFi]

Hey Adam and Steve,

Thank you for taking the time to write this detailed proposal for the Financial Advisor DeFi Toolkit. One of the advantages the mutual enjoys due to its size and design is the ability to serve both on-chain and off-chain markets. Based on your proposal and follow up responses, I think this is a great use of funds.

The users we would be able to reach are within a key demographic, and E&O coverage would be another product that would differentiate Nexus Mutual from other DeFi cover and insurance protocols.

I’m very supportive of this proposal