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.
After the successful launch on Ethereum Ropsten, we are now launching on Polygon Mumbai.
Our protocol testnet launch just got a whole lot better! First of all, we’re transferring Neptune Mutual on the Polygon Testnet this Thursday, March 17, 2022, at 12 MN UTC. New features will be unlocked at the same time as well.
Yes, we heard you! Being a faster and more reliable network, we’re improving your testnet experience on the Polygon network. Our team worked really hard to get it online for you on the Polygon Testnet.
We’ve also bumped up the number of winners for the testnet competition to 100! Don’t miss your chance to be one of the 100 lucky winners, register to Unlock the Gold Vault.
In addition to these exciting announcements, we’ve also added new features to the Neptune Mutual testnet: Incident Reporting and Claiming Cover Policy Payouts.
An incident refers to a hack or exploit on a covered project that by nature of the incident meets the conditions specified by the parameters of the project’s cover pool policy. Anyone with sufficient NPM tokens can report an incident.
Let’s go over what happens when you report an incident on Neptune Mutual.
Step 1: Select the project you want to make an incident report on.
Step 2: Click [Report Incident].
Step 3: Review the cover rules to find out if the incident meets the conditions specified by those rules. If it does, tick the checkbox and click [Report an Incident].
Step 4a: If you are the First Reporter of the incident, you will be required to complete details about the incident namely:
Incident title
Date and time of when the incident occurred
Proof that the reported incident has indeed occurred
Description of the incident
After making your report, you will be asked to stake NPM tokens. The First Reporter will be required to stake a minimum amount of NPM tokens, depending on the cover.
Step 4b: Other reporters that follow after will only need to stake just 1 NPM token.
Step 5: After clicking [Report], the following details are submitted to open up the cover for governance. The reporting period for the specific incident begins.
Note:To make testing convenient, the reporting period on the testnet will only be 30 minutes. However, once we launch the mainnet, reporting periods may typically take 7 days.
Step 6: Navigate to the Reporting tab to see the status of the incident report.
During the reporting period, community members will vote on the validity of the reported incident.
On the page, you will see insights on the reported incident along with the progress and status of the reported incident, and time left to vote on the particular incident.
A Candidate Reporter is the first person to dispute the First Reporter’s incident report. As the Candidate Reporter, you can dispute the validity of an incident report as false reporting.
Step 1: Click on [Add Dispute].
Step 2a: Specify the details of your dispute similar to how you’d report an incident:
Dispute title
Description of the dispute
Supporting information on the invalidity of the report and its inability to satisfy parametric cover rules
Candidate reporters are required to stake a minimum amount of NPM tokens pre-determined by the cover creator.
Step 2b: Other reporters that follow after will stake at least 1 NPM token to either vote to support or disagree with the reported incident.
Step 3: Enter the amount you wish to stake.
Step 4: Click [Approve NPM].
Step 5: Click [Report] to confirm the transaction request from MetaMask and successfully submit your request.
Incident reports get resolved at the end of the reporting period.
The project’s cover policy will compare votes from incident report supporters versus disputers. Honest reporters win while dishonest reporters will find their staked NPM tokens forfeited.
So, how are staked NPM tokens allocated?
60% of staked NPM tokens from the dishonest reporters are rewarded to the honest reporters.
10% of staked NPM tokens from the dishonest reporters will be rewarded to the Final Reporter.
30% of staked NPM tokens from the dishonest reporters are burned.
The primary motivation behind being the First Reporter comes from the benefit of getting rewarded 10% of staked NPM tokens from the dishonest reporters if the incident report is proven true.
On the other hand, the same motivation may apply to the Candidate Reporter when the incident report is proven false.
When a cover policy goes into an incident reporting phase, no one will be able to take out a new cover policy.
If users decide to report incidents without reasonable cause, the consequence of this would be to prevent users from purchasing cover policies for the duration of the reporting period.
In the mainnet application, this will be discouraged by the need to stake tokens, however obviously these are free on the testnet so to avoid this problem, our team will publish real-time incidents for different covers in our Discord community. Incidents will occur at different times of the day and this approach will help us see how quickly users respond and report the incident.
Users who report incidents without reasonable cause (i.e. reporting an incident before there is any incident information released in the Neptune Mutual Discord channel) will incur penalties — such as losing points in the leaderboard rankings.
Once the community validates an incident report, cover policyholders may now claim their payout.
Let’s take a look at how you can claim a cover policy payout on Neptune Mutual.
Step 1: Choose the cover you want to make a claim to.
Step 2: Navigate to the [Claim Cover] tab. You will find the list of Active and Expired reports you have a cover from.
Covers with validated incident reports will have a cover card with a ‘Claimable’ status. A ‘Reporting’ status indicates that an incident has occurred for a particular cover yet it is still in its reporting period.
On the cover card, you will see your purchase amount for the particular policy. Also, you will find the timeframe for when your policy should be claimed. If the policy expires, you will be unable to make your claim.
Step 3: Select the cover.
You will see your transaction details with information such as the address to validate your claim, the amount of cxTokens you will receive from the claim, and the date for when your claim expires.
Step 4: Click [Claim].
Step 5: Enter the amount of cxTokens you want to claim.
Note:A transaction processing fee will be deducted from your claim.
Step 6: After you click [Claim], you can now confirm your transaction from the MetaMask notification window. And…
