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.
Exploring Cardano utilizing Polkadot's Substrate framework for its partner-chain project.
In the rapidly evolving world of blockchain, the concept of "partner chains" has emerged as a groundbreaking innovation. It is poised to redefine the capabilities and collaboration within this space.
Cardano, a blockchain technology facilitating dApp creation, is partnering up with Polkadot to build partner chains. Through this collaboration, the protocols don’t only plan to merge technologies; they envision driving the blockchain industry forward into a more interconnected and efficient future.
In this blog post, we are going to dive into the details of the partnership between Cardano and Polkadot and what the collaboration aims to achieve. Let’s start with brief introductions to Cardano and Polkadot.
Founded by Charles Hoskinson, one of the co-founders of Ethereum, Cardano has established itself as a key player in the blockchain arena. Known for its rigorous scientific approach, Cardano has developed its own unique blockchain technology, emphasizing scalability, interoperability, and sustainability. Its layered architecture, consisting of the Cardano Settlement Layer (CSL) and the Cardano Computation Layer (CCL), has set new standards in the blockchain world.
Polkadot, on the other hand, stands out for its core principle of enabling different blockchains to communicate and share information in a secure and trust-free environment. Its unique technology allows various blockchains to be connected into a single, unified network, enhancing their functionality and efficiency. This vision of interoperability and scalability has positioned Polkadot as a pivotal player in shaping the future of blockchain technology.
Both platforms, renowned for their unique contributions to the blockchain ecosystem, are now joining forces to tackle some pressing challenges in the industry, including scalability, interoperability, and user-friendliness.
The announcement, which came as a part of Cardano's ongoing efforts to explore new technological frontiers, was met with enthusiasm and high expectations.
Polkadot revealed that Cardano will use Substrate, the foundation of the Polkadot SDK, to build a “partner chain”. The news was announced on Twitter on November 6, 2023.
1/ Cardano will use Substrate, the foundation of the Polkadot SDK, to build out its “partner chain” project — showcasing Substrate's potential to expand across Web3, and its ease of use for other chains and ecosystems 🛠️
As per the tweet and its successive threads, Input Output Global (IOG), the leading developer of Cardano, displayed appreciation for Substrate and described Substrate as a “proven open-source modular framework”.
The partnership revolves around the integration of Polkadot's Substrate framework into Cardano's new "partner chain" initiative. This collaboration is set to transition Cardano from a single-chain concept to a web of multiple chains. This enhances the network’s capabilities by leveraging the unique strengths and features of each of those chains.
Understanding Polkadot’s Substrate Framework and Cardano’s Partner Chains#
Polkadot's Substrate Framework is an advanced blockchain-building framework that allows developers to create their own customized blockchain with ease. Substrate offers unparalleled flexibility and scalability, making it an ideal choice for diverse blockchain applications.
“Partner chain” is conceptualized by Cardano, and it’s about creating a global network of interconnected blockchains. Each partner chain, while independent, can benefit from Cardano’s robust security and liquidity features. This initiative aims to establish a more cohesive, efficient blockchain ecosystem where different chains can collaborate seamlessly.
The integration is mutually beneficial. For Cardano, Substrate's modular nature allows for enhanced flexibility and innovation within its ecosystem. Polkadot, meanwhile, gets to showcase Substrate’s versatility and applicability across different blockchain environments. This further strengthens the position of Polkadot as a foundational tool in the Web3 space.
By combining Cardano's security, liquidity, and reliability with the modular technology of Polkadot, new blockchains can be launched with greater ease and effectiveness. This innovative approach is expected to streamline blockchain development, making it more accessible and functional.
Key Challenges Addressed by the Cardano and Polkadot Partnership#
The partnership is strategically positioned to address critical challenges in the blockchain space, such as interoperability and security. The integration of Substrate with Cardano’s infrastructure paves the way for smoother cross-chain interactions, while Stake Pool Operators (SPOs) are set to play a pivotal role in maintaining the security and integrity of the partner chains.
Issues like tokenomics and vendor lock-in are also being addressed through this collaboration. With innovative solutions like Babel fees, the partnership aims to facilitate more sustainable and equitable economic models for new networks, ensuring they are not restricted to any specific technology stack.
The announcement of the Cardano-Polkadot partnership had a notable impact on the market, particularly on the price of ADA, Cardano’s native token. ADA experienced a surge in value, reaching a peak of $0.32. Although there was a subsequent correction, the overall trend remains bullish until the current date (November 12). This indicated that the market was optimistic about this partnership.
Image - ADA token price data; source: TradingView; Date: Nov 12, 2023; Time: 9:15 GMT
The market's response shows us the potential and significance of this collaboration. Investors and enthusiasts alike have shown increased interest, reflected in the trading volumes and discussions across various platforms. The stability of Polkadot’s DOT token, in contrast, suggests a more measured market reaction, in line with broader market trends.
By combining Cardano's security, liquidity, and reliability with the modular technology of Polkadot, new blockchains can be launched with greater ease and effectiveness. This innovative approach is expected to streamline blockchain development, making it more accessible and functional. The partnership between these two well-known players in the space has the potential to significantly improve interoperability, scalability, and innovation. It can potentially create a more dynamic and efficient Web3 ecosystem.
Neptune Mutual is a decentralized parametric insurance coverage platform offering coverage for funds and digital assets. Our cover marketplace, offering covers in Ethereum, Arbitrum, and BNB Smart Chain, allows projects to create cover pools for their users to purchase. Just reach us through our contact page if you are in need of setting up a cover pool.
If you want to learn more about Neptune Mutual, follow our X (Twitter) account and join the Discord chat.
