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 what 2023 holds for the blockchain industry and what new trends to anticipate.
The crypto and DeFi markets have been through the mill for the most part of 2022. There was a bit of optimism early on in the year with everyone expecting Bitcoin and other cryptocurrencies to continue their impressive bull run from the year before. Alas, here we are in December 2022 and Bitcoin has struggled to stay above $17,000 for the last couple of weeks. All the other cryptocurrencies have also seen their values drop massively throughout the year.
The DeFi and Web3 markets have not fared any better. Specifically, the total value locked (TVL) in DeFi shrank from over $176 billion in December 2021 to a meager $40 billion just a year after.
But it hasn't been all bad news for blockchain projects and communities. There have been tons of new developments and positive updates that make us excited to look forward to the new year ahead.
What does 2023 have in store? What changes and new trends can we expect in the blockchain industry over the coming months?
Well, we don’t have a crystal ball to see into the future. But we can analyze current market data to get an idea of what trends may dominate in 2023 – a year that seems like it will be fraught with change.
Estimated at over $1 quadrillion, the total value of financial derivatives in the traditional financial markets is humongous – even larger than the global GDP.
For those not in the know, financial derivatives products are contracts whose respective values are derived from the performance of an underlying entity. This can be anything from precious metals, livestock, oil, or even index derivatives that are tied to the performance of well-known indices like the S&P 500, Nasdaq 100, etc.
Given the integral role that derivative contracts play in traditional finance, it should be no surprise that derivatives are emerging in the DeFi landscape. However, in contrast, the total value of the DeFi derivatives market is a meager $27.8 billion. While there is still a long way to go until it is a respectable distance from the total value of financial derivatives in the traditional financial markets, it also means there is a lot of room for unprecedented growth.
Some of the biggest names in DeFi derivatives include Maker, Synthetix, Perpetual, dYdX, and BarnBridge. These projects help facilitate the exchange of value, as well as provide users the opportunity to speculate on tokens that provide exposure to the underlying assets without having to buy them directly.
User interest in these projects has soared in 2022. For instance, Google searches for “MakerDAO” and “Synthetix” went up over 455% and 360% respectively, this year. Will this interest translate to a more robust DeFi derivatives market in 2023? Only time will tell.
Search interest in "MakerDAO" has grown over the last year. Courtesy of explodingtopics.com
Directly related to the growth of DeFi derivative products is the rise in prominence for DeFi Insurance.
Like its traditional counterpart, DeFi insurance is all about mitigating risk exposure in high-risk environments. Basically, DeFi insurance matches DeFi users looking to earn income with those looking to reduce risk.
Nexus Mutual, InsureAce, BrightUnion, and Bridge Mutual are among the leading names in decentralized insurance. These blockchain-based insurance protocols help facilitate peer-to-peer insurance coverage where funds are pooled and the liquidity in them is used to underwrite claims. Cover purchasers pay a premium to this pool and receive a payout based on the terms of the contract.
A recent and exciting addition to the expanding lineup of DeFi insurance protocols is Neptune Mutual. What makes this platform standout is that it is a marketplace for parametric insurance to cover against smart contract risk. Under this insurance model, coverage and payout are based on predetermined parameters. If a predefined trigger event occurs, policyholders get a payout; if not, they don’t. It’s that simple.
The Neptune Mutual parametric cover marketplace went live on November 8, 2022 and currently has cover products for several DeFi and CeFi projects, including MakerDAO, Synthetix, AAVE, Balancer, and Binance Exchange.
One of the primary appeals of DeFi dApps is that they are inherently anonymous. Names are not attached to wallet addresses and there’s no standard Know Your Customer (KYC) policy nor government regulatory body in place.
Many people believe this level of anonymity should be preserved, however, there are also valid concerns that a lack of some form of KYC oversight makes it easier for cybercriminals to operate and go scott free.
For this reason, many industry experts view regulation for crypto and DeFi projects as being inevitable.
Certain regions have already set up regulatory frameworks that are starting to see some form of implementation. In March, the European Parliament announced that all crypto transactions must be traceable, as part of the new EU anti-money laundering package. This ban on anonymous transactions applies even to the tiniest value transfers.
What this means is that developers must find ways to incorporate identity verification for users of their dApps. It will be interesting to see how they go about it without compromising the ethos of operating within a decentralized financial system.
What Do You Think 2023 Has in Store for the Defi Ecosystem?#
Overall 2023 promises to be an exciting year for DeFi. That being said, it’s important to remember that the landscape is still relatively new, especially when compared to traditional financial institutions. There are lots of known and unknown risks haunting the space all the time, so you’ll need to be proactive with your safety and security measures for your digital assets.
Secure your favorite DeFi tokens and other related assets against smart contract risks with a parametric cover policy on Neptune Mutual. Find a cover product, input how much coverage you want and for how long. You can check out our video tutorials to learn more about how to interact with the marketplace.
