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.
We're pleased to announce that on Saturday, October 8, 2022 at 11:30am UTC.
We're pleased to announce that on Saturday, October 8, 2022 at 11:30am UTC, we'll be running
a Gleam competition to launch our marketplace on the Fuji Avalanche testnet. This follows months of intensive security
reviews and final optimisation of the UI, along with the introduction of a major new feature. The competition will
last for three weeks, closing at 11:30am UTC on Saturday 29th October.
There will be prizes for more than 100 winners once again! This time, winners will receive not only future NPM tokens
but also one of the brand new Neptune Mutual collectible NFTs! Users who want to compete are encouraged to join the
Neptune Mutual Discord channel for the most up-to-date information on the testnet competition as well as the NFT
series.
To encourage user participation, we will re-run our Hall of Fame dashboard, which monitors user activity in the
marketplace and awards points accordingly.
We've made a few changes to our parametric marketplace, so this testnet launch is a little different from our 1st testnet launch as we are now keen to
get feedback on the addition of the major new feature: Diversified Cover Pools.
Another change is that we are running it on the Avalanche Fuji testnet (as opposed to the Polygon Mumbai testnet we
used for our first tesnet trialà); we look forward to introducing Avalanche users and projects to the advantages of
parametric cover, and of course welcoming all to our Neptunite community on Twitter and in Discord.
A Diversified Cover Pool
provides liquidity to a portfolio of cover products; each cover product relates to a specific project and has its own
card in the marketplace. Each cover product has its own specific cover policy trigger parameters, and if an incident
arises, then all the policyholders of that specific cover product are paid out from the diversified pool. In this way,
partial payouts of liquidity are possible from a diversified cover pool in the sense that each cover product is
allocated only a portion of the total liquidity of the diversified pool.
Good for Cover Purchasers, Great for Liquidity
Providers#
Much of the narrative around cover protocols is aimed at cover policy purchasers. This is understandable as the prime
objective of cover protocols, whatever their approach, is to mitigate the risk of users against some form of risk. In
order to achieve this goal, it is a fundamental requirement that cover protocols source capital that can be used for
underwriting the risks of cover policy holders, and this is where it is important to consider the needs and interests
of those providing the underwriting capital. Diversified pools, as the name suggests, are a parametric pool in which
the underwriting risks that LPs are exposed to are diversified amongst a portfolio of cover products. This opens up
the opportunity to leverage underwriting capital to provide better returns to LPs so that low risk projects can be
grouped together in a way that satisfies both the return needs of the LPs as well as the low premiums expected by
cover purchasers of low risk projects. Diversified Pools are therefore good for Cover Purchasers because it opens up
the opportunity for parametric policies to be created for a much wider variety of low risk projects that would have
been difficult to source underwriting capital with the Dedicated Cover Pool model. Diversified Pools are great for
liquidity providers, because of the potential to generate leveraged returns for a diversified set of cover products.
Understanding exactly how
underwriting capital works is a vital part of understanding the Neptune Mutual Ecosystem, and this is why we
have written about both these topics in our blog.
Create → Test → Learn → Repeat
The main goal of the second testnet competition is to get feedback from users on this new type of parametric pool and
other changes we have made. For this reason, users can earn bonus points in the testnet competition by reporting bugs
or by making suggestions on how the application could be made better to provide an outstanding user experience.
Our Discord channel is very active and is the ideal place to keep up-to-date with the activity
associated with our testnet2 competition. Chat with our moderators, ask questions, provide feedback and get the latest
updates directly from the Neptune Mutual team.
Follow our announcements and other future releases on Twitter and Discord based channels.
Test the Neptune Mutual protocol on https://test.neptunemutual.net/.
You are also encouraged to check through the videos released on our Youtube channelin order to learn about each of the different sections of
our platform.
Head over to Metamask, and choose your preferred test network as Fuji. Visit https://faucet.avax.network/ to acquire
your Avalanche Fuji testnet tokens, and the Neptune Mutual YouTube channel for detailed instructions.
There is no entry or participation fee associated with this competition.
The first place winner gets a Surprise NFT Treasure Vault and the second place winner gets a
Surprise NFT Treasure Box. The other 100 winners each receive $100 worth of NPM
tokens at the IDO or public round price and one Neptune Mutual NFT.
Please note that our decision is final and we will individually select winners at our sole discretion. When we select
winners, we will give special preference to people who have submitted bugs or issues found in our protocol. We will
also manually check and delete fake and spam entries.
Neptune Mutual project safeguards the Ethereum community from cyber threats. The protocol uses parametric cover as
opposed to discretionary insurance. It has an easy and reliable on-chain claim process. This means that when incidents
are confirmed by our community, resolution is fast.
Join us in our mission to cover, protect, and secure on-chain digital assets.
