The Investment Committee team presents its August 2024 newsletter, where we share insights surrounding the Capital Pool and Nexus Mutual’s investments. The goal is to make key data transparent and easily accessible to everyone.
State of the Capital Pool
Monthly Change
The Capital Pool has reduced by 2.3% in ETH terms this month. The largest impact was from withdrawals via the RAMM, with 2.8k total redemptions (July: 1.8k ETH) reflecting the exit of a large wNXM position this month. There has been a large positive FX impact as a result of the stablecoin holdings due to the drop in ETH price over August, as well as an above-average result from Cover Fees.
The various impacts on the capital pool are summarised in the waterfall chart below.
The cover fee income is net of distribution commissions and excludes covers paid for in NXM. In such a case, the cover fee gets burned and there is no change in the Capital Pool.
→ Members can track in/outflows on the Ratcheting AMM Dune Dashboard.
→ Members can track the cover income on the Covers Dune Dashboard.
End of Month Pool Split
The split of the Capital Pool at the end of August ‘24 in ETH terms is as follows.
A portion of the DAI was again used to repay the outstanding Aave USDC loan and the largest portion of cover buys in August were again denominated in USDC.
→ Members can find the updated split at any time on the Capital Pool and Ownership Dune Dashboard.
Aave USDC Loan
On August 6th, the Advisory Board repaid 272k USDC from the Aave loan, bringing the outstanding debt balance at the time down from 5.98m to 5.71m USDC
stETH Divestment
On August 21th, the Advisory Board completed the sale of 4,392.68 stETH for ETH as per the Divestment Framework, bringing the total ETH in the Capital Pool back to 12,500.
State of the Investments
In the last month, the Mutual earned 109.2 ETH on its investments, overall, as broken down below.
stETH Monthly Return: 86.438
stETH Monthly APY: 3.249%
rETH Monthly Return: -7.543
rETH Monthly APY: -0.604%
Enzyme Vault Monthly Return: 27.395
Enzyme Vault Monthly APY: 2.332%
Enzyme Vault includes Kiln, EtherFi and Chorus One/Stakewise V3 investments
aEthWETH Return: 15.481
aEthWETH APY: 1.999%
debtUSDC Return: -12.543
debtUSDC APY: 8.619%
Aave Net Return: 2.938
Aave Net APY: 0.377%
Total ETH Earned: 109.229
Total Monthly APY: 1.593%
Based on average Capital Pool amount over the monthly period
All returns after fees
The active staking investments yielded between -0.6% and 3.2% APY. The abnormally low yield on the Rocket Pool portion is a reversion of the 9% result in July. This is a result of an anomalous deviation in the ETH/rETH exchange rate at the end of July.
The Aave USDC debt position, collateralised by ETH, produced a net APY of 0.4%.
The Capital Pool overall earned 1.6% APY based on the average Capital Pool value over the course of the month. This is a slightly lower-than-average result, driven by the anomalous Rocket Pool result.
Investment Committee Priorities
- Documentation completed for ongoing Divestment and Aave loan repayment transactions.
- We are working with Enzyme and Chainlink to incorporate the unclaimed Kiln rewards into the NXMTY oracle. The recent EtherFi and Stakewise/Chorus One investments have gone live and are being captured by the oracle.
- DAO Treasury investment - karpatkey proposal has successfully concluded and the strategies are in the process of being implemented.