Tokenomics Update - October '23

Update 16/10/2023

  • Chaos Labs work on track, main areas of focus are:

    • Testing large swings in Book Value unrelated to swapping within the RAMM
    • Fine-tuning upside with different market behaviour, i.e., balance between capturing capital in the mutual and upward price movements in different scenarios
  • Solidity audit prep progressing well. A few more days needed on both sides, start date moved to 23rd October.

  • Both audit streams still on track to finish by end of October.

  • Internal testing: ramm.sol coverage up to 80% last week.

  • Finishing v1.0 version of RAMM Stage 1 whitepaper, will publish for public review ASAP

  • Docs drafting beginning later this week.


Update 27/10/2023

  • Chaos Labs work in final stretch, hoping to wrap up next week.

  • Solidity audit progressing well, also hoping to finish next week.

  • Internal testing:

    • ramm.sol covered,
    • now mainly testing integrations with other parts of the system
  • Whitepaper and docs being reviewed/iterated on

  • Worked on opening spot/twap values a bit more this week as our previously agreed approach would have resulted in large internal price swings in the few days after launch. Solved by setting the opening TWAP values at specific levels without having to change agreed approach on spot prices. Will post an update next week.


Hi Rei,

Thank you very much for your updates. Great to hear that the economic audit as well as the Solidity audit are both progressing well.

From my perspective, as a large holder of NXM, I would like to know what mitigations the team have in place against, admittedly, far-fetched situations. In particular could you perhaps expand on:

  1. Mitigations against potential bad actors within the mutual.
  2. Mitigations against potential external bad actors.

Both of these groups may see this revamp as an opportunity to take advantage of the mutual during a period of significant change. Certain mitigations I see, but I am unsure of viability, include: 1) Putting in place further security around the Multisig. 2) Heightened developer monitoring during the initial release of the RAMM. 3) Not sure if this contradicts the parameters set in prior discussions, but piecewise addition of ETH liquidity might be an option as well.

Would love to hear your thoughts as these are risks that do not show up in any audit, and are by nature more ‘people’ oriented.

Thank you for all your hard work.

Hey @NXMBull,

As the team has shared before, the RAMM’s security at launch is a paramount concern and one that the Engineering and R&D teams have prepared for. I’ll answer your questions and provide an overview of the security measures that will be in place below.

The Nexus Mutual protocol has an on-chain governance system that is not controlled by a multisig and is fully on chain. All mutual members can vote, and there is a special type of membership, which is called the Advisory Board. Advisory Board members act as the guardians of the protocol. They’ve been around since early days and are fully aligned with the long-term success of the protocol. Every Advisory Board member uses a hardware wallet to secure their signing address.

The Advisory Board has the power to prevent malicious proposals from executing. To learn more about the Advisory Board, see this section in the Nexus Mutual documentation.

The Advisory Board will have the power to execute an emergency pause of the RAMM contract; the Advisory Board also has the power to enable and disable an emergency pause for the entire protocol if a vulnerability is discovered. If the emergency pause is enabled, it will prevent any swaps from happening.

The Engineering team will be closely monitoring the Nexus Mutual smart contracts when the RAMM launches. The team already has smart contract monitoring in place, but there will be enhanced monitoring in place for the RAMM launch.

The Engineering team will be using circuit breakers in the RAMM smart contract at launch, which will limit the maximum amount of ETH that can be withdrawn and the maximum amount of NXM that can be minted via capital contributions over a defined period of time. The limits will be progressively raised over time, after careful monitoring of the system.

The circuit breaker is the technical implementation of the “piecewise addition of ETH,” as it allows only specific amounts to flow into the RAMM before the limits can be increased. At the same time, the ratchet is also in a way doing exactly this.

These measures have been taken in addition to the Solidity audit that is underway and the economic audit that Chaos Labs is performing. The economic audit was specifically chosen to find scenarios where individuals could potentially take advantage of the parameter settings or the design features within the RAMM, as all potential economic vulnerabilities wouldn’t be found in a Solidity audit.

I’m happy to answer any other questions you might have. I’ll be sharing more information about the audit results and the security measures in place for the RAMM launch when the team is ready to announce the timing of the on-chain governance proposal.


hey! any updates of recent?

Happy Monday!

  • Economic review and Solidity audits both have draft reports & in feedback cycles, working to finalise & publish asap.
  • Whitepaper & Docs drafted, now in formatting stage.
  • Hoping to put forward next steps this week.
1 Like

thanks Rei! onwards :slight_smile: