After much deliberation and careful thought Neptune Mutual decided to close the cover marketplaces.
After much deliberation and careful thought Neptune Mutual decided to close the cover marketplaces. Below the reasons for the decision as well as what it means for the community.
The marketplaces will be closed using an emergency withdrawal process whereby the liquidity provided to cover pools by LPs will be returned to the wallet addresses from which the liquidity was supplied. In addition to protecting cover pool LPs, there will also be refunds to all cover policy purchasers with an existing and valid policy who have paid over 10 USD in policy fees in one transaction.
For veNPM holders, please fill out this form to receive a refund for your veNPM to NPM conversion penalty.
From the end of June there will no longer be NPM emission incentives for LPs i.e. Epoch 3 of the liquidity gauge emissions will be canceled.
Unused funds raised from financial backers will be returned to those backers; this includes DEX liquidity that has now been removed from SushiSwap and Uniswap. A small amount of liquidity on SushiSwap Arbitrum has been left to enable a minimum amount of NPM trading.
The protocol will be open sourced, and become a true public good. Enabling the community to fork the code developed by the Neptune Mutual team such that others might use the existing resources to further our mission to make the blockchain space better protected against smart contracts and other risks.
There are numerous factors that have led to this difficult decision, some of which are external factors which are uncontrollable or unforeseeable. A few factors summarized below:
“Given Neptune Mutual’s Tier 1 backers, why have you not listed on a top CEX?”
This is perhaps one of the most frequently asked questions. In short, the answer is that for a variety of reasons Neptune Mutual was not able to achieve the diverse set of performance metrics (community size and engagement, marketplace user activity, DEX 24 hour trading volume, TVL growth etc.) required to list on top tier CEX. The CEXs that are prepared to list NPM token do not have the depth of liquidity or breadth of user-base to offer good prospects for NPM tokenholders.
“Why has Neptune Mutual not achieved strong growth?”
It is tempting to take a shortcut to answer this question by pointing a finger at one specific factor, but the reality is that there are many contributing factors. A few summarized below:
Since the outset of engaging with the community we have endeavored to highlight the need for DeFiInsurance; Neptune Mutual built a comprehensive dataset of on-chain hacks available, anywhere, and each week we highlight the many millions of dollars that are stolen as a result of smart contract hacks. Despite this, we have consistently been confronted by projects unwilling to spin up cover pools in our marketplace because of the sentiment that audits of their code are sufficient to persuade their community that their protocol is safe. Less than 0.3% of all digital assets are protected with some form of DeFiInsurance, and yet despite all the media reports of hacks, the conference discussions about the importance of governance or CEX proof-of-reserves, it continues to be the case that it is extremely difficult to get media attention to focus on the need for a fast and efficient means of mitigating smart contract risk.
A variety of approaches have been taken by different DeFiInsurance protocols to address this, from attending multiple conferences throughout the year and significant marketing spend, to the leaner approach that Neptune Mutual took (in part as a result of the bear market in 2023). What can be said is that no DeFiInsurance protocol has managed to achieve significant growth over the last 18 months, sadly the overall TVL of the sector has shrunk a lot.
For all the reasons above, at this moment the best course of action is no longer to double-down on investing in growth, but rather to refund unused capital and close the marketplaces.
The consequences are very tough for the Neptune Mutual team who have spent the past 3 years of their time on the mission to facilitate safer environments within DeFi. The team has delivered products according to the roadmap and the fact that the protocol was never hacked, despite attempts being made on the darkweb, is testament to the expertise, passion and absolute focus on security. The team survived the FTX and UST crisis unscathed, and believed that the continued growth in hacks would lead to growth in the demand for a good solution to mitigate these risks, but sadly, as can be seen right across the DeFiInsurance category, this is not yet in sight. So we would like to thank the team for all the dedication, skill and passion invested into the Neptune Mutual project since the outset.
The team will open source the protocol, including blockchain indexing protocol (subgraph alternative), frontend, middleware, database, and backend code, to make it a true public good. This will allow anyone to fork the code and create covers by defining parameters and premium ranges, potentially leading to innovative covers and organic usage.
The Discord channel will be closed to reduce the risk of phishing and other types of cyber attack, any questions / queries will be responded to in the Telegram channel.
We want to take this final opportunity to thank you all for your support.
Neptune Mutual will contact only its financial backers, with whom a signed agreement exists, in relation to next steps (i.e. holding NPM tokens does not qualify you for any form of refund). Contact will be made only from a neptunemutual.com domain email address so please check the source of any email you may receive very carefully. Please ignore any messages from any other email or social media accounts in relation to token/cash refunds.
Grim Wyvern arranges a meet to gather beasts with plans to attack DeFi against Neptune.
The cacophony of voices in the great hall was deafening.
"SILENCE!" bellowed Grim Wyvern, flaring his wings for effect. "One at a time. Fuzzball, what were you saying?" He sneered, gesturing to the horned, werewolf-like sabersquatch at the far end of the table.
The sabersquatch hissed, baring his teeth and tilting his horns forward as he rose from his seat. "My name is Lord Conri, and you will address me with the respect I deserve."
Grim Wyvern inhaled deeply and puffed out his chest. He could destroy the table with one flick of his wings and blast this insolent sabersquatch and the sniveling mermen serpents to the other side of the city in the process. But he knew that would achieve nothing. As annoying and incompetent as these fools were, they were his best hope of restoring glory to the depths.
"Respect must be earned," he snarled. "What have you achieved recently? The humans cause more damage to each other with their $5 wrench attacks than I've ever seen you manage with your opportunistic 'hacks'."
Conri met Grim Wyvern's gaze and held it. There was a spark of defiance in his eyes, but just a spark. He knew Grim Wyvern was right. How can he be feared when simple fuzzing and testing are defeating so many of his plans? "We are working on new exploits. The humans are becoming complacent again too; even you must admit that."
One of the mermen serpents spoke up, "He speaks the truth! Our phishing campaigns of today are almost as successful as the campaigns my great-great grandfather speaks so fondly of when we tempted fishermen out into the dangerous waters."
"History has a way of repeating itself," muttered Grim Wyvern.
"I prefer living in 'the future'," laughed another of the mermen serpents, flicking out its long reptilian tongue as it made a satisfied smile. "A little malware here, a drive-by download there. I can do it all from the comfort of my cave. The old ways were too dangerous. And too dry for my tastes."
A rumbling sound from outside the hall brought the conversation to a halt. The rumbling shifted to form a deep, powerful voice. "You've become soft." It was the voice of Gargantuworm. A giant, fearsome creature with a sting in its tail and the power to choke out the life of anyone or anything that got in its way.
"And lazy—Spreading your malware by looking for fools to install it!" Gargantuworm slithered as he shook his head, causing the bottles on the grand table to shake as if there was an earthquake. "My army of worms is so powerful that it infects validator nodes and exchanges by itself. That's where the glory is, not taking Gwei from... users..." The contempt in his voice was obvious.
"And yet..." sneered Conri, "Neptune rescued the last exchange you attacked. It seems your worms are not all-powerful."
"Say that to my face, you cowardly DOG," snarled Gargantuworm.
Conri and several of his attendants rose at once, claws out, teeth bared, and hair bristling. They started barking and roaring. A merman serpent, clearly high-ranking from the adornments he was wearing, rose from his seat and stood in front of the sabersquatch army, motioning for them to sit.
"Out of my way!" barked Conri. The merman serpent shouted something back, but it was unintelligible over Gargantuworm's laughter and the howls of the sabersquatch army.
"ENOUGH!" screamed Grim Wyvern. This time he let out a flash of flame for effect. "We should not be fighting each other. Neptune and his squad of nannies and freaks have hurt all of us."
"Mermen," he said, his tone conciliatory, "the mischief you're causing with ordinals and precision loss is an act of genius."
"A little off our mission," he added, slightly sternly, "but entertaining. And anything that sows discontent is to be applauded."
The mermen serpents smiled. It was a disconcerting sight. When they smiled, the spikes on their spines stood on end. "I miss the days when the mermaids were around instead of these monstrosities", Grim Wyvern mused to himself before turning back to look out of the Great Hall's window to where Gargantuworm lay. He called out to him, "I'm working on some exploits of my own. But they'll take some time to develop. Gargantuworm, once I have my payload, I may call on you for aid to spread it."
"It would be an honor." rumbled Gargantuworm. "I am eager to learn what havoc a payload created by a mind as great as yours could cause."
"Thank you." Grim Wyvern bowed his head slightly. "All in due time. For now, though, we cannot rest. I hear Salacia and Delphinus have new tools to protect those foolish humans. We must test them and learn what their defenses are now capable of."
Conri rose from his chair. There was an intake of breath from those at the front of the hall, but his demeanor was calmer than the last time he'd taken to his feet. "My bots and scanners are always ready. I have new magic up my sleeve—a trick I want to try on Discord. I've been saving it for when the time is right. Perhaps now is a good time to deploy it."
Murmurs of agreement came from all sides of the hall.
"Yes." Grim Wyvern nodded firmly, and the hall fell silent. "We must keep them busy. Discord is as good a place as any to spread fear, uncertainty, and doubt."
"We are in agreement then," boomed Gargantuworm. "Those foolish humans will learn to fear us once more. Break down Neptune's defenses and drive them out of DeFi forever!"
The beasts cheered in unison: the mermen serpents, the deformed, lyanthopic sabersquatch, and even the ancient gargantuworm mustered something that sounded like an energetic "yeah".
Grim Wyvern smiled. Getting this army of misfits and vengeful beasts to work together was never easy. But there is a code of honor among the hackers and thieves. For now, they have a shared enemy in Neptune. So for now, they would direct their attention at him. Grim Wyvern was determined to enjoy this unity while it lasted.
