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.
BEVO NFT art token is a DeFi payment network that uses a basket of fiat-pegged stable coin, algorithmically stabilized by its reserve token $BEVO to enable programmable payments and open financial infrastructure development.
The underlying cause of the attack is the deflationary nature of the $BEVO token; hence, when the attacker called a function of the contract, it decreased the total value of the token, which in turn altered the return value used to calculate the balance.
The exploiter initially took a flash loan of 192.5 WBNB from PancakeSwap, and swapped them with the Pancake pair in order to receive 757,417 $BEVO tokens.
Step 3:
The exploiter invoked the deliver function, which decreased the _rTotal value of the contract. This further influenced the return value of getRate function, which is used to calculate the balance.
Step 4:
They then called the skim function to transfer the increased PancakePair balance to their own account after manipulating the token balance.
Step 5:
This allowed them to swap 0 $BEVO tokens for 337 $BNB, after which the flash loan amount was repaid leaving the exploiter with the profit of 144 $WBNB.
BEVO NFT, intended to revolutionize the financial infrastructure with its innovative algorithmically stabilized reserve token, was unfortunately exploited due to an oversight related to its deflationary nature. The assailant cleverly leveraged the token's characteristics, managing to walk away with approximately $45,000.
The NFT space has grown in popularity in recent years, making it an attractive target for fraudulent actors. It is therefore crucial to conduct due diligence on the authenticity of NFT projects because of the prevalence of scams in the industry. Failure to do so could result in a financial loss, so when evaluating NFT projects, it is critical to be vigilant and cautious.
In the face of such sophisticated exploits, it's not just about creating robust smart contracts but also ensuring that there's a safety net in place for unforeseen vulnerabilities. This is where Neptune Mutual shines brightly. Had the BEVO NFT art token team allied themselves with us, incorporating a dedicated cover pool within our marketplace, the ramifications of this exploit could have been notably muted. Neptune Mutual's mainstay is offering coverage against the unexpected, ensuring that when smart contract vulnerabilities surface, affected parties have an avenue for redress.
Our specialized parametric cover policies stand as a testament to our commitment to user protection. Those insured under our policies enjoy a streamlined claim process without the need for exhaustive loss documentation. As soon as an incident finds resolution, payouts are facilitated. This immediate redress system, coupled with our presence on renowned blockchain networks like Ethereum and Arbitrum, ensures both accessibility and peace of mind for our users.
But our involvement doesn't stop just here. Neptune Mutual's comprehensive approach extends to in-depth security evaluations. Our seasoned security team, well-versed in the nuances of DeFi and NFT platforms, routinely assesses platforms for potential vulnerabilities. From DNS and web security checks to backend safeguards and advanced intrusion detection, we take a holistic approach to platform security.
