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.
Neptune and Salacia talk about protecting the mortals from the threats of the DeFi seas.
Since the dawn of time, Neptune has ruled the seas, rivers, and streams. While known to his brothers as being fickle and prone to fits of rage, he has a boundless capacity for love. His wife, Salacia, is the main object of his affection. However, he also cares deeply for the mortals that venture into his domain.
He can often be found looking down over the world, watching the bold and brave adventurers that inhabit it. He has seen mortals grow and learn, from venturing out of their caves to building great cities and even attempting to tame the seas. The bravery, capacity for learning, and willingness to dream that the mortals show is something that's always fascinated Neptune. Though all the deities and demi-gods around him had both immortality and power, he often found them complacent and even boring compared to the mortals around him.
Neptune lives in a glorious castle with a tall watchtower that allows him to survey the whole of his domain. He would often sit there for hours, even days at a time, watching the lives of the mortals play out around him. That's what he was doing today when Salacia came into the tower to join him.
"My love, you've been here for days. We're supposed to be leaving for Olympus to meet with your father." Salacia said tenderly.
Neptune sighed, "I'll join you soon. But look at them..." he gestured to the waters below.
"You and your mortals," laughed Salacia. "They'll be alright without you for a few days. Those young ones barely even know we exist."
He nodded. "Times have changed, that's true... but they need us more than ever."
He stared off into the distance, not even looking at the sea anymore. His mind was somewhere else. He thought about the early mortals, who worshiped fire, and their descendants, who gradually tamed nature and built great cities and monuments to his father and brothers. There was a time when he was feared, as adventurers, emboldened by the gentle nature of rivers, attempted to explore the treacherous seas.
But now they had mastered water. Or so they thought, and there was a new challenge. The blockchain. These young mortals may have entered the world too early to explore the stars and too late to get the sense of adventure their forefathers had from the sea, but they were still pioneers in DeFi, and as pioneers, they fell under his domain.
Salacia broke his reverie, "The waters look calm. They just celebrated the solstice. We'll be back in the castle before the sea is treacherous again."
It was then Neptune realized Salacia didn't understand. "It's not the seas I'm worried about. The technology possessed by these mortals is more than enough to handle some pranks or thunder from my brothers. It's the pioneers. They see the potential of DeFi, but they can't see the threats lurking under the water."
Salacia frowned and took a step closer to the castle walls to get a better look at the seas. Waving her hands, she muttered something—a spell to clear the water slightly so she could view the sea bed. She gasped, "What is that?", as she gestured to a snake-like being under the water.
"A merman serpent!" hissed Neptune. "He preys on those poor adventurers. It disgusts me. The mortals used to fear us; some still do today. But we have always been fair. Even my brothers have rules and a code of honor. A twisted one, you may say, but still a code. What they do is senseless. Stealing from the innocent. Taking away their hope and dreams, and for what? We have to protect them."
"I had no idea..." Salacia sighed.
"The world has changed a lot these last few years, for the mortals, at least." Neptune speaks more calmly now. "More changes are brewing too. Those DeFi pioneers know it. They're going to bring freedom to others. Not with sails and oars, but with code. I've been studying them and their work. They've no need for me to protect them on their giant cruise ships and tankers. But they need someone to shield them from the mermen and wyverns and their hacks and phishing attacks. Will you help me?"
Salacia turned from the castle walls and walked back to sit next to her beloved Neptune. She remained silent for a moment.
"Your love for those adventurers will be the undoing of both of us," she scoffed, "but I'll always be there by your side.
Before Neptune could thank her, she added, "Those beasts look powerful. We'll need allies. And it will be difficult to persuade the pantheon to help us. They long for the glory days, they don't want to work from the shadows."
Neptune nodded solemnly. Even he missed the days when the old Gods were worshiped, but helping the pioneers was its own reward. He found their ingenuity refreshing and invigorating.
"Delphinus won't take kindly to the beasts encroaching on his waters," mused Neptune, "and there will surely be others."
He rose from his grand chair and took one last look out over the seas. "But you're right, my love. It's time to go to Olympus. Father doesn't take kindly to tardiness. When we return, we can look for allies and start building our defenses."
Neptune's glance kept shifting back to some pioneers who were heading towards a dark, uncharted part of the world. He was obviously reluctant to leave.
Salacia rose with him and laughed, her eyes shining as she looked at him with affection. "Is the vengeful Neptune worried about those little mortals?", she hugged him. "They'll survive for now. And who knows, father or one of his scholars may be able to help us."
"Smart contracts and cold storage don't seem like things the old Gods would have any care for, but it's worth a try," he conceded.
And with that, he strode boldly towards the door to head back into the castle's halls. The era of ocean exploration may be over, but Neptune knew that he would forever be a guardian.
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