I’m have been a member of nexus since very early. Currently Nexus is mainnet only. What I wonder is, if Nexus has a strategy to move to an L2?
Maybe there is even a way to live for retail costumers mainly on an L2 and big hitters stay on mainnet.
My biggest concern is that we may see 100 gwei for extened time in the next bull and with ETH 10K, this would be a very expensiv world.
I made a screenshot to illustrate this:
For this cover 365 days / 5 ETH ($8225) , I pay 0.097 ETH ($148.51) with the current price of 1645 $ / ETH
This cost me 0.073 ETH in gas if its 100 gwei. This is around$ 120. (The shown 43.10 is the price with the gas right now)
And now we say ETH is 5x in the next bull, this is 8225 $ / ETH
For the gas I will pay with 100 gwei, still 0.073 ETH, but thats $600 then.
So how do you deal with this? Any plans?
Lots of thinking around this over the years. I’m sure you can search my comments in the Discord, but to summarise.
Some key points:
The mutual’s main customers at the moment tend to be businesses or large players with relatively infrequent transactions. eg there isn’t regular high frequency usage such as trading etc. This means that gas costs relative to other platforms have been lower priority than other development work such as V2 and tokenomics
The layer 2 landscape continues to shift quite a lot and it’s hard to know right now who the winners are going to be.
Socialisation of gas costs via covered vaults and other embedded products is likely an area of future development, which again reduces the need to have super efficient gas costs.
Due to the mutual’s architecture, we can’t just deploy on a new chain/L2 to see what happens like other protocols can. Deploying elsewhere requires starting from scratch with liquidity, so to deploy on an L2 requires development of a full cross-chain app. This is large dev work requiring chunky re-writes of existing contracts.
High dev costs, lower priority vs other items and general uncertainty around L2 landscape means the best approach from a strategic perspective at the moment is wait and see. But this is a regular topic of discussion within the core team, so it’s definitely not forgotten.
@Hugh’s comments cover the broader points, but I also wanted to highlight the distribution strategy that the Open Cover team is working on with their Open Cover Nexus Bridge, which they shared information about in June in the [Early access] OpenCover Nexus Bridge live on Optimism forum post.
While the Foundation evaluates a broader L2 strategy and where it fits into the mutual’s current priorities (see the Nexus Mutual Roadmap for the latest), staking pool managers and those who want to build third-party user interfaces (UIs) to sell cover within the Nexus Mutual ecosystem can help bridge existing gaps and expand access to cover on Ethereum L2s.
Thanks @Hugh and @BraveNewDeFi
All valid points. It’s just that I think it’s now the right time to have a strategy and make some move because to develop stuff needs time. But ofc I understand with the current architecture this will not work, because deploying and collecting new capital on every chain is not going to work.
The way OpenCover is may be a good solution. Myself I try hard to quite mainnet because I think maybe already in the next cycle normies will not touch it anymore. I clearly see the costumer need to be protected on this L2 too.
Hi @MartinKrung and thanks for mentioning us @BraveNewDeFi!
We actually just launched publicly on Base and OP: https://twitter.com/OpenCoverDeFi/status/1697232657481183252
First cover is free as well if you want to try it out