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.
An article explaining the major areas to focus on for reaching Web3 to mass users.
Recent years have witnessed a transformative shift in the digital landscape, notably the remarkable progress in Web3 and the DeFi (Decentralized Finance) sector.
While the adoption of blockchain technology and Web3 applications has been growing, the majority of people are still skeptical due to issues related to security vulnerabilities, technological complexities, and other associated challenges.
There's been the idea of getting billions of users on board with Web3, and it's a powerful motivation for those who support this new decentralized way of doing things. However, it's vital to realize that this ambitious goal requires constant efforts from different levels and innovative solutions to address the gap.
To reach mainstream adoption and a first billionusers, Web3 needs its major focus on security, utility, and accessibility. However, these elements are just the tip of the iceberg. Upon looking deeply, there are several other aspects influencing users towards blockchain and Web3.
Let’s discuss the key factors that create a path towards the mainstream adoption of Web3.
Tokens, blockchains, public keys, private keys, and so much more—there’s far too much jargon for the average person to worry about. Even technical users don't have the time to read every smart contract and understand every token they might ever see on the market, or to stay up-to-date with new wallets, bridges, and platforms.
Abstracting all that behind a simple user interface that feels just like a banking app would go a long way toward making DeFi accessible to the average end-user.
Enhancing Security and Reliability in the Web3 Environment#
In a similar vein to the jargon concerns, security and reliability are huge issues. It's still very easy for users to lose investments, either through exploits that are out of their control or just by losing their private keys. For example, the 2017 Parity wallet bug caused the loss of more than 500,000 ETH.
There's also the risk of losing funds to simple typographical errors in addresses, losing your private keys, or having your keys stolen.
Those who entrust their tokens to a third party by participating in staking, yield farming, or other investment options face even greater risks. Hacks, exploits, bugs, and rug pulls have all made the headlines in the last few years. For Web3 to become mainstream, it has to shake off its reputation as being, to quote journalist and researcher Molly White, "an enormous grift that's pouring lighter fluid on our already smoldering planet."
Technology enthusiasts who understand the Web3 space are well-positioned to tell the good projects from the scams, and there are things developers can do to increase the legitimacy of their projects.
At Neptune Mutual, we're helping developers protect their communities through our parametric insurance coverage. These coverages protect users by offering quick payouts in the event of a covered incident, such as a hack or exploit, without having to submit individual claims or proof of loss, giving users peace of mind that their funds are relatively secure.
In recent months, we have witnessed a number of conventional tech brands and corporations joining hands with Web3. You might have seen Visa and Mastercard venturing into Web3 and looking for potential to utilize blockchain technologies for their benefits.
.@PayPal is stepping into the stablecoin game with the launch of $PYUSD, a U.S. dollar-pegged stablecoin on the #Ethereum blockchain issued by @Paxos 🪙
While the convergence has benefited the integrating companies, it has also led to a surge in the Web3 sphere. It also signifies a promising course for the future of Web3, increasing users' trust in the decentralized system. Not only that, users who aren’t familiar with DeFi or Web3 will get hands-on experience with those innovative technologies.
By onboarding more Web2 companies, Web3 projects and companies can effectively broaden their user bases.
Collaboration with influencers within Web3 technology is vital for raising awareness about the benefits of Web3. The more people understand the benefits and values of blockchain, the more likely they are to join, especially if it’s coming from their favorite public figures.
Even popular names make use of modern influencers on YouTube, TikTok, and Instagram. To attract a demographic outside of the typical DeFi space, Web3 companies will need to start doing the same thing. Digitally-savvy influencers can explain Web3 in a way that makes it sound interesting to their followers.
While this situation is improving, cryptocurrencies still exist in a gray area in some parts of the world. Many users stay away from Web3 just because their government has banned cryptocurrencies and declared them illegal in some regions.
Simply knowing the tokens you're buying are regulated and the exchange from which you're buying complies with your country’s or state's regulations gives users some peace of mind that their investments will be protected.
We're still a long way from this being a global trend. Acceptance of blockchain and crypto by governments with appropriate regulatory policies will play an important role in mainstream adoption of Web3. There has been positive news about governments accepting and encouraging crypto usage. For example, Colorado has allowed residents to pay taxes using crypto since September 2022.
As more governments start to accept cryptocurrencies and blockchain and support investments in these areas, users will be more likely to get into Web3 with confidence, and insurance will play a big role in this. Having assets properly protected and regulations in place for these measurements will make both government entities and users more confident in getting involved in the space.
Fostering Awareness of Web3 and Crypto through Education#
To many people, the terms blockchain, Bitcoin, DeFi, Web3, and NFTs are all the same thing. They've heard about blockchain and someone getting rich or losing it all by investing in crypto on TV or social media platforms. But they don't really know how it works or what it is. People need to understand that crypto is not a get-rich-quick scheme but a revolutionary technology to ease financial transactions, enhance online security, and decentralize the digital world.
Given the complexity of the blockchain space and how quickly it's evolving, understanding its intricacies is a huge challenge.
The next leap in adoption will come when people realize blockchains can be used for more than just sending and receiving payments. Once the other use cases of Web3 become more well-known, we'll see more users expressing an interest in Web3.
Education will also help drive the adoption we're hoping to see. As mentioned above, crypto leaders, influencers, public figures, and enthusiasts can leverage their platforms to educate users about Web3.
Similarly, we early adopters need to turn our knowledge of Web3 into an opportunity and help newcomers see the potential that we see.
It’s evident that Web3 is here to stay. In December 2020, there was news of DeFi reaching one million users, and in less than 3 years, that number has increased exponentially, reaching over 44 million.
Image: DeFi users number 44,602,997; Date: October 08 2023, image source: Dune
With this growth rate, we can be sure that it's just a matter of time before Web3 reaches the checkpoint of a billion users.
Those of us who got in early have a golden opportunity to shape the evolution of DeFi and reap the rewards, as well as the responsibility to play our part in our own way to help beginners understand the space.
For developers, emphasizing usability and stability to make products more accessible should be the focus. Brand owners should explore Web3 and look for opportunities to integrate it to make their businesses more efficient. As users, leading by example and sharing the simplicity of the process with those around you can make a significant impact.
The Neptune Mutual team is looking forward to the future of DeFi and Web3, with the assurance of more users and companies joining the space.
We believe that awareness initiatives for educating newbies about Web3 have to be started at the project level. To discuss our efforts, we have been active on social channels such as X (Twitter) and YouTube, raising awareness about security in DeFi. We frequently collaborate with blockchain influencers and thought leaders whenever possible. Moreover, we have been organizing initiatives like the content creator program for creators to educate their audience about DeFi.
Neptune Mutual is a decentralized parametric insurance protocol that covers users’ digital assets from several risks in the DeFi space. We have a marketplace where blockchain projects can create cover pools for their communities to insure their funds.
If you are a project owner looking to protect yourself and your community, we can help you create a cover pool in our marketplace. You can reach us via our contact page.
