A few weeks or months ago, the minimum risk cost was decreased from 4% to 2% (minimum cover price decreased from 5.2 to 2.6% APY), but it feels like the number of covers purchased has not recovered still, compared with the numbers that we had when the minimum risk cost was 1%. I wonder if partially the reason is the increased cost of cover? Then I would like to suggest that we reduce the rate again to try to get more covers, since we currently have available and unused capacity for them. What are your thoughts?
The demand is lower now for sure. But if I remember correctly, when the minimum cost was 1%, it was around the time of the SAFE farm. It was artificial demand
Hi! Thanks for your reply. Actually the artificial demand for SAFE farming was the reason to increase the price of cover from 1% to 4%, but the price of cover was 1% before that farming started, and the demand was higher than now (I admit I haven’t checked the numbers, so I may be wrong). In any case, having so much unused capacity now, I would think that lowering the prices of our covers would be positive for the mutual.
I’m not sure the price of cover is the thing holding back people from buying it.
I think people have some question about if NXM will actually pay out. The claims policy is complex, the definition of smart contract failure is somewhat narrow, and it doesn’t feel like you’re really “safe” per say. There also hasn’t really been any major hacks under platforms covered by nexus so there isn’t a lot of precedent to look at. A high publicity hack and a bunch of successful claims/you saved me stories is honestly the best thing that could happen to NXM right now.
I think the other issue is that a LOT of people don’t want to KYC. It seems the guys over at Armor.fi are trying to setup some sort of an anon agency. Taking the time to vet a project like that enough that Nexus can list them as an approved broker of coverage to those wishing not to KYC with a little marketing could lead to a wave of new cover.
Maybe it wouldn’t hurt to offer at least a little bit of cove for more degen protocols? Or even start an active-farmer pool with a higher cover price that allowed someone to use a group of higher risk protocols and move between them? What about a cover across all the protocols nexus covers? Maybe that’s going too far, but we need to be creative and get people excited about it. That’s how crypto works