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.
Learn about the difference between testnet and mainnet and the importance of launching the testnet.
Blockchain testnets are essential tools in the development and deployment of decentralized projects and cryptocurrencies. Testnets enable teams to deploy their protocols in a risk free environment in which users can provide valuable independent feedback and teams can check to see if their code functions as intended.
In this quick guide, we’ll be leveraging our inside experience as a protocol developer that has gone through two testnet deployments within the last few months, to demystify testnets and give some insight into why they are so crucial to the success of the blockchain ecosystem.
From the name alone, you can guess that it is an environment where you can test a network. A testnet is a parallel network designed exclusively for testing purposes.
As every good developer knows, code must undergo rigorous testing before it can be deployed for public use. But these tests must be performed in an environment that mimics the conditions of the main network (mainnet) in order to yield meaningful results. That’s where testnets come in.
These test networks act and perform similarly to their respective mainnets, but they operate on separate ledgers and are completely independent from the mainnet.
This allows developers to freely and extensively test their applications and tokens on a functioning blockchain without having to worry about gas fees and loss of valuable coins.
When a developer is building a token or decentralized application (dApp), they want to be certain that it functions as intended before they deploy it on the mainnet. Running tests directly on the mainnet can be expensive, especially when gas fees are at their highest.
Can you imagine having to pay a network fee every time you run simple user tests? The costs can run into thousands of dollars worth of gas fees.
With testnets, you don’t have to worry about gas fees since you can get a limitless supply of native test tokens. Keep in mind that these test tokens can only be used on their respective testnets.
If developers tested their applications on the mainnet, every test or new update can disrupt the entire network, along with its users’ assets and transactions.
In addition to providing valuable testing infrastructure for developers, testnets also help with quality assurance. Using a testnet provides access to real user actions that can be useful for setting quality standards.
It's really only by allowing users to interact with a dApp that a developer can receive sufficient independent feedback on the user interface design. And in product design it's no secret that a clear and attractive UI is crucial to adoption and growth.
Testing your project on mainnet means exposing it to the same security risks that live projects have to deal with every day. Using a testnet offers the benefit of investigating any vulnerabilities in your dApp in a risk-free environment.
Testnets enable developers to begin building a community around their projects even before launching on the mainnet.
Trust is an essential aspect of community development, and what better way to establish trust than to show exactly what you’re working on and allow people to actively participate in evaluating and improving it?
At Neptune Mutual, for example, we recently launched our second testnet for our parametric cover protocol, this time on the Fuji-Avalanche network, and we already have a growing community across various social channels.
Tokens, and other digital assets, deployed on a testnet cannot be used on the project’s mainnet version, and vice versa. In this way, testnets operate the same way as mainnets, but the actions on one cannot impact the other. For example, you cannot transfer ether (ETH) into any of Ethereum’s testnets. In the same way, you cannot transfer the native ERC-20 token of a testnet to use on the Ethereum blockchain.
For the uninitiated, faucets are web applications that give out crypto rewards to users for completing tasks. Because testnets and mainnets operate on separate tracks, they each have their own faucets. Naturally, this means they both have different wallet networks.
Additionally, the algorithm that regulates the release of testnet tokens strips the tokens of any economical benefit within and outside the testnet blockchain.
Mainnets typically record much higher numbers than testnets when it comes to transaction frequency.
The main technical elements of testnets and mainnets are the same. This is essential because it provides the assurance that if something works correctly on the testnet, then it will also work correctly on the mainnet.
The Ropsten Testnet Explorer is the most used Ethereum testnet. It was launched in 2016 with over 10M ERC-20 testnet tokens deployed. Developers can view Ropsten’s testnet transactions on Etherscan. They can also add Ropsten ETH to their testnet wallets using dedicated Ropsten faucets The Ropsten network was deprecated following the Ethereum network’s switch from a Proof of Work to a Proof of Stake in September 2022.
Mumbai Network (Polygon)
The Mumbai Testnet provides a near-replica testing environment of the Polygon blockchain. It was launched in 2017 and uses a Like Polygon, which launched in 2017, Mumbai also uses the proof-of-stake (PoS) consensus mechanism to process transactions. Its native test token is the testnet MATIC and does not carry any monetary value. Developers can view Mumbai’s testnet transactions on Polygonscan and access testnet tokens from its official testnet faucet.
The Fuji Testnet Explorer is the official testnet environment of the Avalanche blockchain. One of the things that makes Avalanche so popular is its efficiency. At over 4500 transactions per second, this blockchain offers one of the most efficient platforms for today’s developers. Fuji’s native token is Testnet AVAX and can be obtained from the official Avalanche testnet faucet. Developers can view transactions on Fuji testnet on its dedicated SnowTrace C-Chain Explorer.
After a successful run on the Mumbai (Polygon) testnet that lasted several weeks, the Neptune Mutual protocol has since undergone upgrades and is now currently running on the Fuji (C-Chain) testnet.
To connect your wallet to the testnet, open your Metamask and choose Fuji (C-Chain) as your preferred test network. Here is a step-by-step video tutorial on how to connect your MetaMask wallet to the Neptune Mutual testnet protocol on the Fuji (C-Chain) testnet.
Visit faucet.avax.network to obtain your Avalanche Fuji testnet tokens, and then the Neptune Mutual YouTube channelfor detailed instructions on how to purchase cover policies, supply liquidity, report incidents, and stake your tokens.
Participate in transactions and provide feedback on the protocol in our selected Discord channels to earn points. You can access our Leaderboard to see the points you’ve earned and your current rankings.
Lasty, follow us on Twitter and Discord-based channels to keep up with our announcements and other upcoming releases.
