Scope: Initiate new coverage with insurance partner Nexus Mutual on December. 28th 2020
Status: Approved https://snapshot.page/#/badgerdao.eth/proposal/QmNZgiy8Ep1Rs8YdhHzZq84kC4VUQ7YzKpHkJWpX6uYEzy
- Explain what Nexus Mutual is as an insurance provider.
- Receive approval of $BADGER token allocation for shield mining program
Badger has amassed almost $300M in TVL running on our smart contracts. It’s critical we give users multiple options to protect themselves in case of an incident. Apps like ours and DeFi as a whole are so new that I think it’s in the users best interest to acquire insurance.
We launched our first coverage program with much success through a partnership with Cover. As of this article we are the most collateralized and liquid protocol on the platform which includes some of the biggest companies in DeFi. This suggests a large demand by our users for coverage.
After review by the Nexus Mutual team, we’ve been approved to launch a shield mining and coverage program on their platform starting Dec.28th 2020. This would open up a new market segment/exposure for Badger while giving our users multiple options for getting protection when using our app.
Nexus Mutual is the leading platform for smart contract cover with almost $100M in TVL for insurance programs.
How Nexus Mutual Coverage and Shield Mining works https://medium.com/nexus-mutual/shield-mining-is-here-85067a30ab06 .
On top of risk assessors earning NXM for staking on Badger DAO smart contract coverage, they can earn $BADGER through our shield mining program.
To incentivize our shield mining program I propose we allocate up to 75,000 $BADGER tokens.
The goal is to optimize for a reward rate of 2.5% (0.05 BADGER/NXM staked), which at 100k NXM staked would yield about 12 weeks of campaign length if we were to distribute 75k $BADGER. The 2.5% is on a weekly basis, so would be 100% annualized and fall in line with the current coverage rates on Cover for Badger DAO.
We can see how it goes and determine if 75k is too much which will become apparent within a few weeks of program launch. This proposal is for up to 75k tokens not mandatory.
I think those that purchase coverage on our smart contract and in turn are users, are some of the best people to incentivize with $BADGER tokens. There is a higher propensity for them to be active in the DAO and lead it’s direction.
If you are in support of this proposal vote “For”; if you don’t support this proposal vote “Against.”
If minimum threshold of 40 votes is met with positive sentiment then we will proceed with an official Snapshot vote. All voting will end by 5pm EST December 26th.