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 the Guardians harness the power of DeFi insurance to defend against the Beasts
Neptune, God of the Seas, stood on the shore and looked out over his domain. The waters were teeming with life, and he saw many brave and bold adventurers embarking on their voyages into the DeFi seas. They were full of excitement at the possibilities the DeFi seas had to offer, but he knew that there were Beasts waiting beneath the waters—cyber threats and malicious actors seeking for the opportunity to sow mistrust, fear, uncertainty, and doubt across all protocols. He knew he could not let that happen. He had to protect his domain.
Fortunately, Neptune was not alone. Salacia, his one true love and Goddess of the seas, was by his side. A powerful sorceress, Salacia had the skills and cunning required to keep the DeFi seas safe. And all that power would be required today, as the Beasts were rising. There were other protectors, too. The Guardians, Delphinus and Aquavallo, had sworn their allegiance to Neptune, and so too had the other Gods.
The Beasts had been targeting small protocols, testing their methods, and looking for weaknesses. Today, the Grim Wyvern was spotted in the North. This terrible dragon-like creature was both large and nimble, giving it the power to cause chaos and strike fear into the hearts of all who saw it.
Neptune knew that they had to take down the Grim Wyvern before it could cause lasting damage. He gathered his allies, and they set out to catch the wyvern in flight. Together, Aquavallo and Delphinus launched a coordinated attack, with Delphinus using his razor-sharp teeth and Aquavallo his mighty trident. Salacia distracted the Grim Wyvern with her magic, while Neptune defended the team from other lesser Beasts that had hoped to use the Grim Wyvern's attack as a distraction.
The Beasts were powerful, but teamwork prevailed. The Merman Serpent, Gargantuworm and Sabersquatch retreated back into the murky depths. Grim Wyvern was defeated, and for now, the seas were calm. Delphinus and Aquavallo started to celebrate.
"It's not over yet," said Salacia. "We must remain vigilant."
Neptune knew that she was right. He looked out at the seas again and saw all the adventurers exploring this new, exciting world of DeFi.
"They have no idea what just happened—what we saved them from," Neptune said. "We cannot rest until all chains and protocols are safe."
The guardians knew that they could no longer simply sit and wait for the Beasts to attack. If they wanted to protect the world of DeFi for future generations, they needed a new approach. They sought out the wisdom of Reya, an ancient and wise sea turtle who had a deep knowledge of all the arcane protocols.
"Your Majesty," Reya told Neptune, "We must seek out the artifacts of the ancient gods. Use their power to strengthen our defenses."
"What are those artifacts, oh wise one?" asked Neptune.
"The tablet of cold storage, the scroll of audits, and the tome of parametric insurance could give us the tools we need to defend the chains." Reya said firmly before retreating into her shell.
Neptune knew that Reya was right. These arcane and powerful tools gave them hope. But who was brave enough to retrieve them?
Salacia, Delphinus, and Aquavallo volunteered. In chorus, they said, "You're needed here to protect the shores, your Majesty. We will go."
Their journey was longer and harder than any of them expected. It took them across the seas. They visited many exchanges, poured over arcane source codes, fought numerous beasts, and fended off many scams. They knew that they could not fail. The fate of all of DeFi depended on them.
Eventually, they found the first artifact. The tablet. It was solid and heavy in Salacia's hand and protected by a passphrase. Salacia knew immediately that neither she nor any of the guardians could unlock it. Only the rightful bearer, Neptune, could do so.
The hunt continued. Next, they found the scroll of audits.
"Do you understand any of this?" Aquavallo asked, frowning. "It's gibberish to me."
Delphinus laughed, "It's Solidity. The language of the coders—Reya can decode it for us."
"I hope she can," mused Salacia. "The legend says the power of the audit can protect users from all manner of DeFi exploits. It would change the world."
Buoyed by hope, they continued on their journey. The final artifact would complete their defenses. Delphinus was the one to find the tome. But it was locked.
"It won't open..." he said, clearly frustrated.
Salacia, drawing on the knowledge she'd gained from her sorcery mentors, knew immediately what was happening. "The power of insurance comes not from one person but from all who add to its pool. We will all need to work together to use this."
The team set off on the long voyage back to Neptune's golden palace. Content that they had everything they needed to protect their world.
It wasn't long before the Beasts started attacking again. Their initial strikes were thwarted by the magic of cold storage and the strength of audits. But eventually, a group of beasts managed to penetrate a DeFi chain. It was time to put the power of parametric insurance to the test.
Neptune, Salacia, Reya, Aquavallo, and Delphinus came together along with the other Gods and Guardians. Each donated their powers: Wisdom, strength, courage, cunning, and speed combined to thwart the hackers and make the DeFi adventurers whole.
Their collective strength vanquished threat after threat. As news of their work spread, more and more adventurers were drawn to the hope and excitement that DeFi offered.
The Guardians knew that they would never fully vanquish the beasts, but they now had the tools to keep them at bay. Thanks to Neptune's tireless efforts, Reya's wisdom, and the strength and courage of the guardians, the DeFi seas were a safer place for all.
The Neptune Mutual NFT loyalty reward program gives all Neptunites a chance to collect NFTs without having to purchase them. Active users of the marketplace can earn points that can be used to mint exclusive NFTs for free. Learn more here.
