KPK H1 2026 Review for Nexus Mutual
Portfolio performance, movements, protocol context and key actions. January to June 2026.
This review covers the KPK-managed treasury and broader KPK contributions from January through June 2026.
The treasury closed June at $6.17M, down from $9.06M at the start of the year. Three things drove the decline: $2.59M of mark-to-market on NXM and ETH, which price roughly 60% of the book; $0.93M of team funding the treasury paid to the DAO on schedule; and, working the other way, $105k of DeFi yield plus a 3,463 NXM claim (~$171k) received from the protocol. DeFi strategies were profitable in every month, capital utilisation ended June near 97%, and the record of no principal loss since inception is intact, including through the April rsETH bridge incident.
Financial Update
KPK-Managed Portfolio
In the first six months of 2026, the KPK-managed Nexus Mutual treasury achieved:
- Accumulated DeFi yield of $104,799 gross of fees ($65,813 net of the KPK fee accrual)
- On the externally benchmarkable sleeve (stablecoin and ETH strategies), a 4.4% APY against a 3.2% benchmark: +1.1pp for the half.
- A blended APY of 3.0% gross of fees on total assets (staked NXM, stablecoin strategies, ETH LSTs, idle balances), NAV-weighted across the half.
Since its inception in October 2024, the treasury has accumulated:
- $402k of recurring DeFi yield gross of fees, including NXM staking rewards (a blended 2.8% APY), plus a separate $1.98M one-off wNXM-to-NXM conversion gain in October 2025, with no loss of principal.
Monthly and cumulative H1 2026 DeFi yield per Syncrone Strategy PnL (Syncrone - DeFi Portfolio Intelligence), gross of fees and including NXM staking rewards.
Based on the June 2026 monthly report, the treasury stood at:
- $6.17M of ncAUM across seven DeFi protocols.
- ~97% capital utilisation, with only $168k held as idle or wallet balances.
- A gross APY of 2.94% for June (monthly yield annualised).
- DeFi yield of $15,083 in June, versus an H1 monthly average of $17,466.
The monthly evolution below sets out treasury size, gross and net DeFi yield, the KPK fee accrual, APY against the benchmark, and cumulative results across the half.
| Metric | Jan '26 | Feb '26 | Mar '26 | Apr '26 | May '26 | Jun '26 |
|---|---|---|---|---|---|---|
| Treasury total (USD) | 8,065,671 | 7,080,252 | 7,410,570 | 7,546,324 | 6,994,180 | 6,166,338 |
| Gross DeFi yield (USD) | 23,321 | 15,230 | 21,674 | 18,519 | 10,971 | 15,083 |
| KPK fee accrual (USD) | 8,025 | 5,996 | 7,423 | 6,848 | 5,108 | 5,586 |
| Net DeFi yield (USD) | 15,296 | 9,234 | 14,252 | 11,671 | 5,862 | 9,497 |
| Gross APY | 3.47% | 2.58% | 3.51% | 2.94% | 1.88% | 2.94% |
| Net APY | 2.28% | 1.57% | 2.31% | 1.86% | 1.01% | 1.85% |
| Benchmark APY (sleeve) | 3.39% | 2.99% | 2.88% | 3.69% | 3.37% | 3.31% |
| Cumulative gross yield (USD) | 23,321 | 38,551 | 60,225 | 78,744 | 89,715 | 104,799 |
NAV and yield per Syncrone per-period accounting (Syncrone - DeFi Portfolio Intelligence), corroborated by the KPK monthly forum reports (March and June match to the dollar; February’s forum figure excludes NXM staking rewards). Fee accrual at NMDP 8 terms; wNXM valued at monthly closes per Dune 8178445. Wallet balances cross-checked on-chain at 30 June via Dune 8178479. APY = yield / month-end NAV × 12.
The benchmark comparison isolates the lever KPK manages. Roughly half of the book is staked NXM, currently the treasury’s largest allocation for which no external market benchmark exists. The sleeve KPK allocates across open DeFi venues, stablecoin, and ETH strategies returned 4.4% against a 3.2% benchmark (blue-chip stablecoin lending venues and ETH liquid-staking rates, per vaults.fyi, over the same period): stablecoin strategies earned 5.0% against a 3.5% USD benchmark, and ETH strategies 2.3% against a 2.4% ETH benchmark. The fall in treasury assets over the half reflects token prices and the DAO’s expected withdrawals, not the yield result.
Benchmark: NMDP 8 defines none, so this review uses a self-defined construction following the ENS review convention: the vaults.fyi mainnet USD and ETH benchmark series, weighted by the sleeve’s month-end mix. Sleeve APY includes closed-position residuals attributed to the stablecoin sleeve; excluding them entirely the sleeve still beats the benchmark (~3.7% vs 3.2%).
June’s treasury result was −$842k, of which −$858k was mark-to-market on NXM and ETH (wNXM fell 15.6% and ETH 21.8% in the month) and +$15.1k was realised strategy yield.
Portfolio Movements and Composition
Through Q1, the treasury held a steady profile: staked NXM at about 55% of assets across five staking pools, stablecoins deployed in GHO strategies (staked GHO and an Aura-boosted GHO/USDT/USDC pool) and KPK-curated Morpho vaults, and a small ETH sleeve in ether.fi and StakeWise. That profile was tested in April.
On 18 April, an attacker exploited Kelp DAO’s LayerZero bridge route and minted unbacked rsETH, freezing rsETH and WETH markets on Aave and stressing ETH liquidity broadly. The treasury had no direct rsETH exposure, but its GHO positions sat inside the Aave ecosystem. Twenty minutes after the first alert, KPK began precautionary exits: GHO exposure was cut, stkGHO redemptions initiated, and the Balancer V3 GHO/USDT/USDC position unwound, with ~$1.32M of GHO swapped back to USDC. No funds were lost. A residual position in wrapped Aave tokens remained pending a permissions update and was fully unwound by June. KPK published a full account of the incident response on the forum.
May and June were rebuild and rotation. The treasury closed the Sherlock #11 staking pool (~$0.42M), then restaked 74,230 NXM across four pools on 12 May. Stablecoin capital moved from the exited GHO strategies into Sky’s savings rate, then in June into Fluid lending, the Morpho kpk USDC Yield V2 vault, and the DAO’s Real-World Insurance Vault earmark: $250k seeded into the RWI USDC Vault and $500k across two Uniswap USDC/RWIV liquidity ranges, against the roughly $1M the DAO voted to commit to the product.
| Strategy | Jan '26 | Feb '26 | Mar '26 | Apr '26 | May '26 | Jun '26 |
|---|---|---|---|---|---|---|
| NXM staking | 4,504,246 | 3,865,975 | 4,119,634 | 4,178,396 | 3,917,726 | 3,217,018 |
| Stablecoin strategies | 1,791,736 | 1,802,194 | 2,497,317 | 1,533,806 | 1,537,635 | 2,358,269 |
| ETH staking & LSTs | 624,231 | 502,586 | 539,273 | 580,378 | 515,900 | 423,384 |
| Idle & wallet holdings | 1,145,458 | 909,497 | 254,346 | 1,253,744 | 1,022,919 | 167,667 |
| Total (USD) | 8,065,671 | 7,080,252 | 7,410,570 | 7,546,324 | 6,994,180 | 6,166,338 |
| NXM staking share | 55.8% | 54.6% | 55.6% | 55.4% | 56.0% | 52.2% |
| Deployed (capital utilisation) | 85.8% | 87.2% | 96.6% | 83.4% | 85.4% | 97.3% |
Month-end values per Syncrone position-level accounting. April’s idle spike is the post-rsETH de-risking (exited GHO capital held in USDC pending redeployment); June’s stablecoin figure includes the RWI vault and USDC/RWIV ranges. Staked NXM amounts tie to on-chain staking deposits exactly (27,000 / 22,500 / 22,264.94 / 2,464.58 NXM at end-June).
NMDP 8 set the mandate’s opening mix at roughly $3M in wNXM/NXM, $2M in ETH derivatives and $1.5M in stablecoins, defines no per-protocol caps, and gives KPK room to diversify. Staked NXM, the book’s core holding since the mandate was funded, held 52–56% of assets through the half across four to five staking pools, while the stablecoin share of deployed assets rose from 22% in January to 38% in June.
Liquidity tiers are approximate: wallet balances and stablecoin vaults exit same-block; ETH LSTs within a week via liquidity or withdrawal queues; staked NXM sits behind staking tranche locks and exit notice. The instant share rose to 41% by June.
Nexus Protocol Context and DAO Income
DAO income here is the DeFi yield the treasury generates net of KPK fees; cover premiums accrue to the mutual’s capital pool, not the DAO treasury, so protocol underwriting economics sit outside this table.
| DAO income | Jan '26 | Feb '26 | Mar '26 | Apr '26 | May '26 | Jun '26 | H1 |
|---|---|---|---|---|---|---|---|
| Gross DeFi yield (USD) | 23,321 | 15,230 | 21,674 | 18,519 | 10,971 | 15,083 | 104,799 |
| less: KPK fee accrual (USD) | 8,025 | 5,996 | 7,423 | 6,848 | 5,108 | 5,586 | 38,986 |
| Net DAO income (USD) | 15,296 | 9,234 | 14,252 | 11,671 | 5,862 | 9,497 | 65,813 |
Yield per Syncrone; fee accrual at NMDP 8 terms (0.5% management on month-end NAV + 20% of monthly yield), pending collection in NXM/wNXM. The treasury also funds DAO operations: $783,438 USDC and 2,915 wNXM were paid to the DAO operations wallet in H1 (quarterly instalments, per Etherscan).
Reserves and Runway
The mutual’s solvency sits in the capital pool, which backs cover obligations and is managed by the protocol, not the DAO treasury; the minimum capital requirement last updated on-chain at roughly 7,557 ETH (October 2025). The DAO’s own runway is a treasury question. NMDP 15 sets the DAO teams’ budget for August 2026 to July 2027 at 1,108,875 USDC plus 6,930 wNXM, about $1.41M at June prices. Against the June treasury of $6.17M, that is roughly 4.4 years of runway, down from 5.7 years at January’s treasury value; the compression reflects the fall in treasury value over the half.
| Metric | Jan '26 | Feb '26 | Mar '26 | Apr '26 | May '26 | Jun '26 |
|---|---|---|---|---|---|---|
| Treasury NAV (USD M) | 8.07 | 7.08 | 7.41 | 7.55 | 6.99 | 6.17 |
| Runway at NMDP 15 budget (years) | 5.7 | 5.0 | 5.3 | 5.4 | 5.0 | 4.4 |
Runway = month-end NAV / NMDP 15 annual budget with wNXM at the June 2026 close ($43.45, Dune 8178445). MCR per on-chain MCRUpdated events (Dune 8178624); the mutual’s capital pool is reported separately by the protocol.
Governance and Strategy Actions
Since the beginning of 2026, KPK has taken the following actions for Nexus Mutual DAO:
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rsETH incident response and disclosure ([Forum] rsETH Exploit: KPK Precautionary Actions & Impact Summary). Within twenty minutes of the 18 April alert, KPK confirmed the incident and executed precautionary exits from Aave-linked GHO positions through the permissions layer. No funds were lost and no bad debt was incurred. A full public account, including the residual wrapped position and the follow-up permissions work it requires, was posted to the forum on 27 April.
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Executing the RWI earmark ([NMPIP] Real-World Insurance Vault). The DAO voted to commit roughly $1M of treasury capital to the mutual’s Real-World Insurance product. KPK executed the first tranches in June: $250k seeded into the RWI USDC Vault and $500k deployed across two Uniswap USDC/RWIV liquidity ranges, earning stablecoin yield while the earmark fills.
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NXM staking consolidation (May). KPK closed the Sherlock #11 staking pool position (~$0.42M) and restaked 74,230 NXM across four pools on 12 May, consolidating the mandate’s core allocation across four active pools.
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Monthly reporting ([Forum] Nexus Mutual DAO Treasury Updates). KPK published monthly treasury updates to the forum for February through June, each linking the full Syncrone report with position-level detail, PnL decomposition and transaction history.
Lookback on the Mandate
In the first half of 2026, KPK remained focused on executing its role as the DAO’s treasury manager under a demanding market.
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Operational execution and oversight: KPK maintained responsibility for routine treasury operations on Ethereum mainnet, including position monitoring, transaction execution, quarterly DAO operations funding, and permissions management under the Zodiac Roles framework. Capital utilisation ended the half near 97%.
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Risk management under stress: During the April rsETH event, KPK moved from alert to executed exits in twenty minutes, cut the treasury’s Aave-linked exposure precautionarily, and rebuilt deployment as conditions stabilised. No funds were lost. The episode also identified one redemption path not yet covered by the permissions set, which KPK disclosed and is addressing in the next permissions update.
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Performance against the mandate: On the sleeve KPK allocates across open venues, the treasury beat its benchmark by 1.1pp gross for the half, with a positive strategy result in every month and capital utilisation near 97% at the close. Within the mandate’s room to diversify, the stablecoin share of deployed assets rose from 22% to 38% across the half, and the DAO’s RWI earmark was put to work as voted.
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Transparency and collaboration: Monthly reporting ran on the Syncrone dashboard with forum summaries for every month from February, the rsETH response was disclosed in full within nine days, and treasury data in this review is reproducible from public sources (Syncrone, the forum thread, and public Dune queries 8178445 and 8178479).
Conclusion and Next Steps
The first half of 2026 repriced the treasury, and the strategy held. NXM and ETH marked the book down by $2.59M and the treasury funded $0.93M of the DAO’s team budget on schedule; the strategies underneath stayed profitable every month, utilisation ended near 97%, and the rsETH event was navigated without loss.
The structural shift matters more than the drawdown. The treasury now holds capital inside the mutual’s own product stack, seeding the RWI USDC Vault and its Uniswap liquidity, alongside a simplified stablecoin book in Fluid, Morpho and Sky. That is the direction of travel: a treasury that funds DAO operations, earns benchmark-beating yield on its liquid sleeve, and puts its balance sheet behind Nexus products.
In H2, the treasury begins funding the DAO’s new budget year under NMDP 15, and KPK intends to continue filling the RWI earmark as the product scales and to keep monthly reporting running through Syncrone and the forum.
We appreciate the trust Nexus Mutual has placed in KPK and look forward to the work ahead.