Nexus Mutual is the leading insurance protocol for DeFi today. With its protocol support for BarnBridge, users can now purchase coverage on their deposits into BarnBridge to protect against smart contract risk. The amount of coverage available to users to take out is determined by a) how much ETH value is available to the mutual in total, and b) how mutual members stake their NXM tokens in order to allocate that coverage.
This SnapShot vote is to determine whether the BarnBridge DAO will set aside 11,000 BOND to be paid out pro rata in shield mining rewards to Nexus Mutual stakers at a rate of 212 BOND per week.
These figures are based on what it would require for NXM stakers to earn a ~1.25% yield on staking in favor of BarnBridge, pre-compounding, assuming a BOND price of $50 and $45,000,000 worth of NXM staked (i.e. near BadgerDAO’s amount).
BarnBridge will benefit from the extension of insurance coverage for depositors as it will allow more risk-averse users to participate in SMART Yield, the DAO, and subsequent applications with appropriate safety. Moreover, shield mining rewards can be calibrated in the future as needed.
Consider the following resources: