Nexus Mutual claims process
Nexus Mutual Claims Process Nexus Mutual was the first decentralized insurer going live. Their claims process has shown to be robust and reliable as it has paid out 18 claims worth more than $5 Million. Their process relies heavily on the 2 layers of community voting which has shown to be a credible process.
Despite the efficiency of this process, a single bad actor with a big share of NXM token can theoretically maliciously influence the claims assessment process. As a mitigation for this risk, the Advisory Board which oversees this whole process, has the power to [liquidate/burn] this individual’s NXM for fraudulent voting, until Nexus Mutual is fully decentralized. To date, no malicious claims have been paid out yet. If you are making a claim at Nexus Mutual, here is what is going on behind the scenes:
- 1.You are hacked and you submit a claim and for the amount of funds you have lost.
- 2.The claim is voted on by the Nexus Mutual Claims Assessors.
- The Claims Assessors are real community members. They stake their NXM tokens which allows them to vote on claims. Each vote is weighted based on the amount of NXM staked.
- These Claims Assessors are incentivized to be in the majority of voters [70% or more]. This will reduce the likelihood of a few bad eggs trying to benefit for personal gain
- Those who vote within the majority are rewarded. 20% of the premiums from the claim are given to these Claims Assessors.
- If they do not vote in the majority [for example, someone tries to reject the claim, when 90% of Assessors vote to accept], their stake in NXM is locked for another 7 days. [This disadvantages them as they are unable to trade/invest/utilise their NXM token for other purposes temporarily]
- 3.If there is no agreement, the fee pool for Claims Assessors is lowered and the vote [may be] opened to ALL members with a simple majority (>50%).
- If the vote is not opened to ALL members, then the simple majority of the Claims Assessors votes are taken as consensus.
- This decision is used to activate the smart contract and trigger a refund [or not]
Claims process Nexus Mutual
Screenshot of claim submission Nexus Mutual