Update Capacity Factors

Potential Protocol Changes
#1

Capacity on some several protocols is being limited by staking now, rather than the global capacity limit, and with NXM decreasing in value recently this has limited potential cover purchases.

Staking 3.0 will enable more leverage to be built into the system but in the meantime I believe we can be slightly more aggressive with the capacity factors for established protocols.

Right now capacity factors are:
2x for most smart contract covers
1x for newer ones
2x for Custody Cover

The biggest risk in increasing factors is the potential attack vector where there is an embedded bug and cover is taken out longer term to exploit it. This is almost irrelevant for large established protocols so I believe the upside is worth the risk here.

More generally, I believe we should start being a bit more aggressive with risk settings to push further growth.

Here are my recommendations, which focus on increasing factors where we see the most demand and for those protocols which are stable:

Protocol Current Factor Suggested Factor
Mooniswap 2 2
Set Protocol V1 2 4
RenVM 2 4
Opyn 2 2
1Inch 2 2
Argent 2 4
UMA 2 3
Curve All Pools (incl staking) 2 4
Synthetix 2 4
Yearn Finance 2 4
dForce Yield Market 2 2
dydx 2 2
Aave V1 2 4
mStable 2 2
MakerDAO MCD 2 4
Ampleforth Tokengeyser 2 2
Balancer 2 4
Compound V2 2 4
Uniswap V2 2 4
bZx 2 2
Saturn DAO Token 2 2
Gnosis Multi-sig 2 4
dxDAO 2 2
Nuo 2 2
Pool Together 2 2
dydx Perpetual 2 2
DDEX 2 2
Tornado Cash 2 4
Deversifi 2 2
0x V3 2 2
Gnosis Safe 2 4
Uniswap V1 2 4
Totle 2 2
Flexa Staking 2 2
Paraswap 2 2
Melon 2 2
Moloch V1 2 2
IDEX 2 2
Kyber - Katalyst 2 2
Bancor Network 2 2
Yam Finance 2 2
Idle V4 2 2
tBTC Contracts 2 2
NuCypher Worklock 2 2
Akropolis Delphi 2 2
DODO exchange 1 1
CoFix 1 1
Pool Together V3 1 1
Set Protocol V2 1 1
Yield Protocol 1 1
Eth 2.0 1 2
Hegic 1 2
Keeper DAO 1 1
C.R.E.A.M. 1 1
TrueFi 1 1
Alpha Homora 1 1
Celsius 2 4
BlockFi 2 4
Nexo 2 4
inLock 2 4
Ledn 2 4
Hodlnaut 2 4
Aave V2 1 2
4 Likes
Nexus Mutual Community Fund
#2

Pretty much OK with you, just wondering about Hegic and Aave v2 that are maybe a bit young.

3 Likes
#3

Glad to see this proposal! We should fulfill the demand for established/high demand protocols. :+1:

2 Likes
#4

Two things that would be helpful for me are the following:

  • an indication of “where the action is” from the staking interface. Where does the mutual need capital and where are the returns? For example, I’ve staked against some of the protocols with little cover (expecting there to be some), but little demand so I’ve lost out rewards. How do I max out rewards given risk/reward potential?

*costless re-staking. If I want to move from one cover to another, I have to unstake/restake. I realize this is a bit of a bigger ask, but a Loopring type thing where I could move funds w/o gas costs to stake where the action is might increase value. I’d still be locked into “staking” and a 90 day unstaking, but maybe more liquidity within the staking environment. Easier said than done, I am sure.

3 Likes
#5

Awesome feedback as usual @jer979, thanks!

We’re discussing the demand one internally, we recognise the challenge as there is a chicken/egg problem that is made more challenging with the 90 lock.

re switching, we can’t allow immediate switching as if a claim comes in then stake just escapes, however I’m sure there are other things we can do.

tl:dr no solid answers right now, but this feedback is on our list and we’re working on it.

2 Likes
#6

I agree with Benjamin that stuff like Hegic is still too new. I’d also have belly pain with increasing Celsius to 4. Let’s not forget these CeFi businesses are also risky and just recently Cred filed for bankruptcy, after their funds had been lost due to fraud: https://www.coindesk.com/crypto-lender-cred-files-for-bankruptcy

1 Like
#7

Updated list with suggested changes only. Have been more conservative based on feedback.

Will aim to put this into governance soon, probably at the same time as the 90->30 day staking unlock period.

Protocol Current Factor Suggested Factor
Set Protocol V1 2 4
RenVM 2 4
Argent 2 4
UMA 2 4
Curve All Pools (incl staking) 2 4
Synthetix 2 4
Yearn Finance 2 4
Aave V1 2 4
MakerDAO MCD 2 4
Balancer 2 4
Compound V2 2 4
Uniswap V2 2 4
Gnosis Multi-sig 2 4
Tornado Cash 2 4
Gnosis Safe 2 4
Uniswap v1 2 4
2 Likes
#8

Hey @Hugh

Would these kind of changes be automatically adjusted in a governance-minimized way in the long term? We could have cover for 1,000 protocols at some point and reviewing/deciding factor adjustments for each of them would be too manual. I understand the current situation but was wondering if this is part of the long term governance minimization plans.

#9

We’re aiming to remove them when we move to Staking 3.0, so yes.

1 Like