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Neptune Mutual to Close Cover Marketplaces

5 min read
Neptune Mutual Final

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:

CEX Listing#

“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.

Growth Performance#

The above point invariably leads to the question

“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:

The DeFiInsurance Narrative#

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.

Continue to Invest in Growth, or Refund?#

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.

What's Next?#

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.

Disclaimer:#

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.

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Monthly Review - September 2022

3 min read
Monthly Report
Monthly Review September 2022

Neptune Mutual mainnet launch scheduled for later in 2022, Second testnet to launch on Fuji.

TL;DR#

  • We’re all set to deploy the Neptune Mutual testnet2 protocol on the Fuji Avalanche network on the 8th October. Join Discord for details of our testnet2 competition.
  • We created the Exploit Analysis blog category so our readers can better understand how a hack or exploit incident was executed.
  • Neptune Mutual mainnet launch scheduled for later in 2022.

Protocol Updates#

Among the many updates and improvements, we’re particularly excited to introduce a completely new type of parametric pool called a Diversified Cover Pool. This new type of pool will open up the opportunities for parametric protection to a much wider range of blockchain projects. There are a number of important differences between dedicated cover pools and diversified pools and we have provided an overview of these differences in the blog called Enhance Liquidity via Diversified Cover Pools.

As you might expect, we have made a number of changes to the search function and other UI aspects of the protocol to help search for cover products either directly or by category of cover pool (dedicated/diversified).

Upcoming Events#

After several weeks of working on security and UI improvements, we’re delighted to announce that the Neptune Mutual testnet2 competition will start on the 8th October. The competition will run through to October 29th, and will reward over 100 successful participants with amazing rewards. This time rewards for winners will include an allocation of future NPM tokens and, new for testnet2, an allocation of some of our brand new NFTs.

Mainnet is launching soon! That’s right, the Neptune Mutual protocol is expected to go live later this year. Our engineering team has been hard at work, finalizing everything for our mainnet protocol, and we’re nearly ready for our users to begin accessing parametric digital asset protection.

We’ll keep you updated and publish an official statement as soon as we are in a position to share details of the mainnet launch.

Blog Digest#

As part of our commitment to keeping our community up-to-date on security issues affecting the blockchain industry, we created the Exploit Analysis blog category that looks at decoding the hacks and exploits that impacted blockchain projects over the course of the month. For September, we broke down GMX’s Price Manipulation exploit, Omni Bridge’s Call Data Replay exploit, and Wintermute’s Hot Wallet compromise. Check them all out here.

In our blog post How to Safeguard Against Malicious Websites, we looked at the most common platform-based attacks, including DNS spoofing, DNS Tunneling, and NX-Domain Attack, as well as how Web 3 users can avoid falling victim.

Parametric cover is a new approach to digital asset protection that is very different from the discretionary approach used by a number of protocols to compensate for individual loss. This is why we’re sure you’ll find our blog on How Discretionary and Parametric Covers are Different interesting. Parametric cover policies available in the Neptune Mutual marketplace help streamline the process of claims and payouts in the blockchain space. They eliminate the need for individual loss assessment allowing for quicker, more reliable payouts in the event of a predetermined hack incident. Not only is this approach more efficient and scalable, but it can also provide income earning opportunities for key stakeholders.

Lastly, our blog post Unpacking the Basics of the Metaverse looks at what the Metaverse is all about, including current developments, risks, assets, and growth opportunities. Stay tuned to part two of this post where we discuss parametric insurance protection in the Metaverse.

Team#

We’re looking to expand the Neptune Mutual team by onboarding a Cyber Security Research Analyst / Content Creator. Qualified candidates may visit our Linkedin post for more details about the position.

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Tags

Monthly Report Monthly Review Testnet Avalanche Fuji Decentralized Insurance Parametric Insurance Crypto Safety

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