Reposting from the previous arNXM whitelisting proposal thread.
I am in favor of this proposal to whitelist arNXM. Note that arNXM is the interest bearing version of wNXM which we already have whitelisted and are incentivizing (See wNXM Proposal). Besides Nexus Mutual, there aren’t many viable competitors in DeFi insurance and Bancor has the opportunity to corner the insurance market if we bring the different types of Nexus Mutual tokens (arNXM/wNXM for now) to Bancor.
I posted the following in an existing thread which is relevant to this topic:
Disclosure: I am an NXM holder
I am for this proposal, just like I was for the NXM proposal even though some of the other community members have bashed this pool for not having enough volume. The reason for this, is because Nexus Mutual and Armor play an important role for Bancor (and in DeFi) in that it incentivizes those communities to stake against the Bancor smart contract.
Before we whitelisted and worked with Nexus Mutual on the liquidity mining program, the premium that you had to pay for Bancor insurance on Nexus Mutual was over 30%. It is now 2.6% which benefitted our community greatly. The active coverage amount for Bancor right now is roughly 27M which means that members in this community have been purchasing insurance to cover their positions:
Active Coverage for our Competitors
| Project | USD | ETH |
|---|---|---|
| Uniswap V2 | 48021750.82 | 29182.61918 |
| Bancor | 27876205.56 | 16940.25472 |
| 1Inch (DEX & Liquidity Pools) | 24416473.95 | 14837.79014 |
| Balancer V1 | 21217634.44 | 12893.86861 |
| SushiSwap V1 | 10425679.66 | 6335.642369 |
Only uniswap has a larger amount of active coverage than we do at the moment but that’s partly because you can’t buy insurance on Nexus Mutual for Bancor as it is sold out and requires more staking (there is demand from our members). Nexus Mutual members have staked more in the uniswap smart contract than ours:
Amount Staked for our Competitors
| Project | USD | NXM |
|---|---|---|
| Uniswap V2 | 29887369.35 | 474924.1642 |
| Bancor | 23383366.46 | 371572.541 |
| Balancer V1 | 22002848.76 | 349635.4742 |
| SushiSwap V1 | 19196934.03 | 305048.1874 |
| 1Inch (DEX & Liquidity Pools) | 18654299.81 | 296425.4779 |
Note: The active coverage (they also have more available) amount for uniswap is roughly 2x what has been staked against their smart contract. This is because they have a capacity factor of 4 as compared to Bancor which is currently at 2. Capacity factors were Increased recently for Uniswap and other projects (link1 link2) and there is no reason why they wouldn’t do so for Bancor as well, as long as we keep working with these communities. Full list at the bottom.
Armor is just a reseller for Nexus Mutual (no KYC) and also happens to be the largest staker of smart contracts in the Mutual:
We can incentivize that community (by passing this proposal) to stake in the Bancor smart contract which ultimately benefits us (it will open up coverage for our members). The project is relatively new (launched in late January) and they have been trying to bootstrap liquidity in uniswap,sushiswap,1inch, and balancer but not in Bancor. This is a great strategic opportunity for us to engage with that community and bring them over to Bancor (as opposed to other AMMs).
List of Recently Updated capacity factors in Nexus Mutual
| Protocol | Current Factor | Suggested Factor |
|---|---|---|
| Set Protocol V1 | 2 | 4 |
| RenVM | 2 | 4 |
| Argent | 2 | 4 |
| UMA | 2 | 4 |
| Curve All Pools (incl staking) | 2 | 4 |
| Synthetix | 2 | 4 |
| Yearn Finance | 2 | 4 |
| Aave V1 | 2 | 4 |
| MakerDAO MCD | 2 | 4 |
| Balancer | 2 | 4 |
| Compound V2 | 2 | 4 |
| Uniswap V2 | 2 | 4 |
| Gnosis Multi-sig | 2 | 4 |
| Tornado Cash | 2 | 4 |
| Gnosis Safe | 2 | 4 |
| Uniswap v1 | 2 | 4 |