There will always be risks related to interaction with cryptocurrencies and recent proof of this can be seen in recent weeks after skilled hackers managed to escape with millions of dollars in tokens of Bitmart, AscendEX Y BadgerDAO exchange.
Nexus Mutual is a decentralized platform that allows investors to secure insurance coverage against smart contract exploits and today altcoin rallied by 38% even as Bitcoin and the crypto market in general continue to correct.
Data of Cointelegraph Markets Pro Y TradingView shows that after hitting a low of $ 46.59 on December 13, the price of the protocols' native WNXM token soared 38% to a daily high of $ 69.22 on December 14.
Three reasons for WNXM's sudden price reversal include a number of new partnerships and integrations with the Nexus Mutual protocol, a growing total value locked within the Nexus Mutual ecosystem, and the project's ability to successfully cover victims of exploits from protocol that involved the loss. Of funds.
Partnerships Expand Nexus Mutual Ecosystem
New partnerships and protocol integration with various DeFi platforms appear to be one of the driving factors behind WNXM's current rally.
Recently, the developers behind Nexus Mutual made community calls with mStable, Balancer Labs, Alpaca Finance, Notional Finance, and PoolTogether.
The project has also seen a steady increase in the number of hedge policies purchased, with some multi-million dollar policies opened in the last week at Curve, Anchor, Stake DAO and OlympusDAO.
As shown in the chart above, Nexus Mutual experienced a 53% increase in the number of policies sold between November 22-29, and the total value of coverage offered increased by 121%. The increase in usage resulted in a 125.8% increase in premiums earned from the protocol.
Total locked value is increasing
The total value locked at Nexus Mutual has also increased in the last 6 months and data from Defi Llama shows that the metric peaked at $ 780.58 million on November 9. Currently, the TVL at Nexus Mutual stands at $ 585.33 million, reflecting the strong market recession that began last week.
Users of the protocol have the option to stake NXM tokens with projects that they believe are safe as financial backing for the coverage provided. In exchange for funding the hedge, users receive a return on their wagered tokens and a current average APY of 4.96%.
Based on data provided by the Nexus Mutual app, there is currently $ 1.1 billion wagered through the protocol, $ 25.5 million in purchased coverage, and $ 12.7 million in paid rewards.
Related: 'DeFi is the most dangerous part of the crypto world,' says Sen. Elizabeth Warren
Satisfied customers are good for business
A third reason for Nexus Mutual's growing strength and WNXM's price appreciation has been the proven track record of curing victims after they lose money due to a smart contract exploit or protocol hack.
One of the DeFi platforms that was covered by Nexus Mutual prior to a exploitation of $ 100 million It was Cream Finance, a protocol that has suffered back-to-back losses in 2021 due to flash loan attacks and exploits.
Fortunately for those who had purchased coverage prior to the exploit, the Nexus Mutual community has paid multiple claims for lost funds.
Late Post: I want to thank the team at @NexusMutual for accepting my claim, I'm actually crying right now, I'm so thankful, I didn't even realize I was affected by CREAM's financial exploit until I tried to withdraw my $ BNT funds in CREAM. I recently quit my job to go ...
- Kar im $ BNT (@ Kareim30184380) December 8, 2021
VORTECS โข data from Cointelegraph Markets Pro It also began to spot a bullish outlook for WNXM on December 11, ahead of the recent price spike.
The VORTECS โข score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements, and trading activity. Twitter
As seen in the chart above, the VORTECS โข score for WNXM climbed into the green zone on December 11 and peaked at 77 around 57 hours before the price rose 49% over the next day.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risk, you should do your own research when making a decision.
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