Victor Ugochukwu · Oct 22, 2020 . 5min read
Nexus Mutual introduces Shield Mining starting with KEEP Network
With Shield mining, stakers can earn any protocols' native tokens anytime they provide cover on Nexus Mutual platform.
By Victor Ugochukwu · Oct 1, 2020 . 6min read
Smart contract risk insurance platform, Nexus Mutual announces Shield Mining, an innovative staking feature that incentivizes smart contract cover for users starting with KEEP Network.
Normally, Stakers deposit Nexus Mutual native token – NXM into contracts that they think are secure. Consequently, others can now purchase smart contract cover for that system.
With Shield mining, these Stakers can now earn any of such protocols’ native tokens anytime they provide cover. In essence, stake NXM, earn protocol native tokens while the ecosystem remains healthy. A win-win for all from what it appears to look like.
KEEP Network, the platform behind the trustless tBTC – a Bitcoin pegged token which was recently relaunched is the first to commit a reserve of 750,000 KEEP tokens for Stakers.
Consequently, every NXM Stakers receives extra 2 KEEP for 1 NXM staked in additional to Nexus Mutual’s normal staking rewards. It will distribute rewards weekly without supporting retroactive claiming. What this means is that if a staker fails to claim in a particular week, then it will be forfeited. Users can claim their shield mining rewards from Nexus Mutual UI.
How does Nexus Mutual’s Shield Mining feature impact the DeFi space?
Interestingly, we have seen several smart contract failures within the DeFi space. For instance, YAM where Degens deposited about $600 million before the discovery of a critical bug leading to rebase failure. However, some others have happened as “Rug pulls” (a new term which describes when DeFi project pioneers exit scams).
In addition, Shield mining from Nexus Mutual helps to keep the yield farming frenzy we see today that pervades the DeFi sector alive. Most critiques against DeFi’s recent meteoric rise holds the view that liquidity mining is an unsustainable model. Shield mining looks like a rather more sustainable version of yield farming.
Also, as we saw with the rise of Uniswap enabling DeFi project owners to bootstrap liquidity, shield mining model works in a similar vein. Nexus Mutual’s latest feature provides an avenue for projects to crowdsource smart contract insurance cover.
We can see its impact on how Stakers rushed in to deposit into the KEEP- tBTC smart contract available on Nexus Mutual. An excited Matt Luongo, the CEO of KEEP NEtwork tweeted this as a response.
Nexus Mutual shield mining feature is open-source. Hence, sponsors can provide a number of their tokens, and set the distribution rate (tokens / NXM staked / week).
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Komal Joshi · Oct 22, 2020 . 5min read