# Idea: $BAL to incentivise smart contract insurance cover **URL:** \ **Category:** Liquidity Mining \[deprecated\]\ **Created:** [August 6, 2020, 11:18pm UTC](https://forum.balancer.fi/t/idea-bal-to-incentivise-smart-contract-insurance-cover/182 "2020-08-06T23:18:51Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![nxm\_memes](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/nxm_memes/32/156_2.png) [@nxm\_memes](https://forum.balancer.fi/u/nxm_memes)\ **Post date:** [August 6, 2020, 11:18pm UTC](https://forum.balancer.fi/t/idea-bal-to-incentivise-smart-contract-insurance-cover/182/1 "2020-08-06T23:18:51Z")
**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](https://medium.com/@NXM_Wizard/the-art-of-smart-contract-insurance-c32ef5a288e6)). **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. ![Screen Shot 2020-08-07 at 9.04.31 am](https://canada1.discourse-cdn.com/flex027/uploads/balancer/original/1X/995b1380aa714b6c41cef1af58cbd9caf9e1888f.png) 4% of liquidity mining incentives every year = 145k/100_4 4_1.45k $BAL @ current price of $12.95 = $75,110 There are currently only 161 $NXM stakers providing $1,472,695 (USD) worth of capacity 4% of token rewards would result in an additional nearly 5% subsidized APR or more > > > Tyler Reynolds @tbr90 ---
**Author:** ![5325235235235](https://avatars.discourse-cdn.com/v4/letter/5/6bbea6/32.png) [@5325235235235](https://forum.balancer.fi/u/5325235235235)\ **Post date:** [August 6, 2020, 11:52pm UTC](https://forum.balancer.fi/t/idea-bal-to-incentivise-smart-contract-insurance-cover/182/2 "2020-08-06T23:52:56Z")
I’ll vote “no” I don’t think the hypothesis is true I don’t think it’s worth 4% of the rewards ---
**Author:** ![tongnk](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/tongnk/32/160_2.png) [@tongnk](https://forum.balancer.fi/u/tongnk)\ **Post date:** [August 7, 2020, 12:01am UTC](https://forum.balancer.fi/t/idea-bal-to-incentivise-smart-contract-insurance-cover/182/3 "2020-08-07T00:01:12Z")
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 ---
**Author:** ![nxm\_memes](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/nxm_memes/32/156_2.png) [@nxm\_memes](https://forum.balancer.fi/u/nxm_memes)\ **Post date:** [August 7, 2020, 12:01am UTC](https://forum.balancer.fi/t/idea-bal-to-incentivise-smart-contract-insurance-cover/182/4 "2020-08-07T00:01:17Z")
> [@5325235235235](#): > > I’ll vote “no” > I don’t think the hypothesis is true > I don’t think it’s worth 4% of the rewards What if this was done for only 3 months as an experiment? (this would only be 1% of the total rewards a year) ---
**Author:** ![1A1zP1eP5](https://avatars.discourse-cdn.com/v4/letter/1/7cd45c/32.png) [@1A1zP1eP5](https://forum.balancer.fi/u/1A1zP1eP5)\ **Post date:** [August 7, 2020, 5:32pm UTC](https://forum.balancer.fi/t/idea-bal-to-incentivise-smart-contract-insurance-cover/182/5 "2020-08-07T17:32:43Z")
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.