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.
After all the time, effort, and brainpower we are happy to announce the launch of our testnet.
After all the time, effort, and brainpower put in towards the launching of our testnet protocol, our team can’t be more excited and proud to present to you Neptune Mutual’s public testnet. The amount of passion and dedication invested in this testnet comes alive with how smooth and interactive it looks and functions.
You will find how easy it is to use the Neptune Mutual testnet. And how accessible parametric cover policies and cover pools are through our platform.
Let’s take you through how you can use the Neptune Mutual testnet and the many features it has available.
Once you’re there, click [Connect Wallet]. Choose which wallet provider your wallet belongs to. If it’s MetaMask, choose Metamask. By then, your wallet should get connected.
Step 1: If you choose to [Purchase Policy], you will get a brief overview of the project.
It will show you the amount of stablecoin in the cover pool along with the liquidity available to underwrite policies available in the cover pool.
On the right, a reporting period section shows you how long it will take the community to validate an incident after it is reported.
Typically, the reporting period on the (Ethereum) mainnet will be 7 days. However, for the testnet, it’ll only take 30 minutes to make testing easier.
You’ll also find the cover rules that define the conditions that’ll trigger a cover policy to make a payout.
If a hack or exploit on the project is reported, the community will refer to these cover rules in making a decision on whether or not the cover pool should make a payout to its cover policyholders.
It’s crucial that you understand these cover rules and review them in detail before you purchase a cover policy.
Step 2: If you agree with the cover rules, you can confirm your cover policy purchase by clicking the checkbox and [Next].
Input Amount for Cover Protection
After agreeing to the cover rules, you can now input the amount of cover protection you need.
Step 3: Select your coverage amount.
Then, you’ll receive cxDAI that you’ll hold on to for the duration of the cover policy.
You will use these cxDAI tokens to make your claim in the event the community decides your policy should get a payout after the incident.
Step 4: Select your coverage period.
You’ll find your claim’s expiry date and the cover fee you’ll need to pay in stablecoins.
Step 5: Click [Approve DAI] then confirm the transaction.
Afterward, you should see the notification: Purchase Policy Successfully.
Step 6: To check your new policy, go to the [My Policies] tab at the top of the screen.
You should find your new cover policy on your dashboard.
If you choose to [Provide Liquidity], you’ll get a brief overview of the project similar to that when you choose to purchase a policy.
In the overview, you’ll see the policy’s reporting period, the reassurance amount, and the total liquidity available for underwriting policies expressed in dollars.
You’ll also find the cover rules that define the conditions for providing liquidity.
It’s crucial that you understand these cover rules and review them in detail before you provide liquidity to the cover pool.
Step 2:
If you agree with the cover rules, you can provide liquidity and confirm by clicking the checkbox and [Next].
Input Amount to Provide Liquidity
Once you agree to the cover rules, you can now input the amount of liquidity you want to provide to the cover pool.
You must stake at least 250 NPM tokens in order to participate in the pool. You need to provide the specified stablecoin, in this case, DAI.
Step 3: Enter the number of NPM tokens you wish to stake.
Step 4: Enter the amount of stablecoin liquidity you want to supply.
As a result, you should get an equivalent Proof of Deposits token (POD) against the liquidity you provided in DAI.
Each cover will have its unique POD.
PODs across different liquidity pools have different smart contracts which make them non-interchangeable.
Note: To make testing easier, the timeframe to unlock your liquidity will be set to 1 hour after being supplied to the pool.
Step 5: Click [Approve DAI] and [Approve NPM].
Step 6: Confirm each of the continuing transactions in your wallet.
