Investment Hub Newsletter - June 2024

The Investment Hub team presents its May 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 2.1% in ETH terms this month. The largest impact has still been from withdrawals via the RAMM, but these withdrawals have notably slowed (2.3k ETH instead of 2.8k ETH in May). There has been a positive FX impact as a result of the stablecoin holdings due to the slight drop in ETH price, as well as good results from Cover Fees and Investment holdings.

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 June ‘24 in ETH terms is as follows.

Untitled (7)

→ Members can find the updated split at any time on the Capital Pool and Ownership Dune Dashboard.

Aave USDC Loan

On June 7th, the Advisory Board repaid 85k USDC from the Aave loan, bringing the outstanding debt balance at the time down from 6.23m to 6.15m USDC

State of the Investments

In the last month, the Mutual earned 150.2 ETH on its investments, overall, as broken down below.

stETH Monthly Return: 86.596
stETH Monthly APY: 3.135%

rETH Monthly Return: 35.127
rETH Monthly APY: 2.886%

Kiln Monthly Return: 23.751
Enzyme Monthly APY: 2.002%; Kiln Portion Monthly APY: 4.124%

aEthWETH Return: 16.451
aEthWETH APY: 2.134%
debtUSDC Return: -11.755
debtUSDC APY: 8.886%
Aave Net Return: 4.696
Aave Net APY: 0.605%

Total ETH Earned: 150.17
Total Monthly APY: 2.113%
Based on average Capital Pool amount over the monthly period

All returns after fees

The active staking investments yielded between 2.9% and 4.1% APY. The high yield on the Kiln portion is a result of obtaining referral rewards through Enzyme, amounting to 6.8 ETH deposited in June in addition to the normal staking result.

The Aave USDC debt position, collateralised by ETH, produced a net APY of 0.6%.

The Capital Pool overall earned 2.1% APY based on the average Capital Pool value over the course of the month.

Investment Committee Priorities

  • The Divestment Framework NMPIP consultation period has ended. The IC is working with the Foundation Engineering team to prepare for the governance vote and to coordinate the first stETH → ETH transaction. Due to the lower withdrawal amounts, it is now expected to occur late July/early August.
  • The Stakewise/Chorus One and EtherFi proposals have gone through a signalling vote and an NMPIP is up to enact the investments. We are speaking to the Enzyme team to finalise specifics of the allocation process.
  • DAO Treasury investment work - ongoing conversations with a service provider, finalising proposal.
  • An NMPIP has been posted by the Investment Committee to propose a framework for repaying the Aave USDC loan and actions to take in the case of significant ETH price falls. Working with the Foundation Engineering team to set up appropriate alerts and ensure that actions can be taken quickly enough to mitigate associated risks.
  • We are also considering the future operations of the Investment Committee and how we best contribute in the next 12 months following the coming August DAO Teams budget renewal.