Dear Nexus Mutants,
Within days of yinsure.finance launch, 7 key protocols have reached max capacity (not staking bottleneck): yearn, aave, balancer, compound, curve, uniswap, synthetix (Figure 1). Some of them occupying 10% global max, while some are 20% global max. Clearly, the whole capital pool is almost exhausted (either horizontally or vertically).
At current capital pool size (~$70M), MCR increasing 1% every day can only open up ~$700k cover availability every day and is not enough to meet daily cover demands. When the mutual was very scalable back in August, we had ~$2M daily cover purchase (Figure 2). My twitter poll suggests that the mutual should meet ~$4M daily cover purchase (Figure 3).
Clearly MCR increasing 1% per day is the limiting factor right now. To open up $4M daily cover availability, MCR should increase 6x current rate, which mean 6% per day. That means the mutual should accelerate MCR increment to 4h to stay competitive.
Someone else will profit from this if we can only meet $700k daily cover availability when DeFi is asking for $2-4M (as of today) (Figure 4, 5). We are lucky that yinsure.finance is complementary to Nexus Mutual, rather than replacing us. But you’ll never know . In order to stay competitive, Nexus Mutual should offer enough cover availability to meet conservatively $2-4M daily cover demand. Our strategy should focus on meeting customer demand as our top 1 priority (Figure 6).
Figure 1. Max Capacity
Figure 2. ~$2M daily cover purchase
Figure 3. Ideal daily cover availability
Figure 4. Real cover demand
Figure 5. #yNFT secondary market
Figure 6. Meeting customer demand is our top 1 priority