Proposal idea: Provide 4% of yearly $BAL liquidity mining rewards for providing liquidity/staking for Nexus Mutual smart contract insurance (to learn more about Nexus Mutual).
Why? At the moment, there is about over $17.8M USD worth of smart contract insurance cover being taken out on Nexus Mutual, and 1.78M / 10% of that has been taking out by Balancer users. The hypothesis here is that there is a large untapped audience of potential Balancer users (mostly whales) who would be willing to use Balancer - but ONLY if there was insurance for their staked funds.
It’s a great concept but the platform is so unproven I’d say the capital is better utilised elsewhere. From the digging that I have done the responses that I got from the community was that they will act in the best interest and properly accept claims because it’s in their best interest to do so from a public image/perception perspective (though I still have bought insurance just to try it out).
Additionally until the coverage is broader I think it’s going to be super hard to even justify the risk - it only purely covers smart contract hacking right now and we always know there are going to be edge cases like the makerdao event that happened…
I’d rather take the proposed 4% BAL tokens and put it into the ecosystem grants
Insurance is definitely a good idea and it’s probably a necessary building block for larger amounts of assets to come into DeFi (at least this is true in legacy finance). But, while I think the NXM team is doing awesome things, I don’t think the NXM business model is scalable, so I am not sure this would attract significant amounts of capital on their side.
