We are very excited to announce our participation in Nexus, an Ethereum-based insurance mutual.

The concept of a mutual insurance (an insurance company that is owned entirely by its policyholders) is one of the earliest insurance organizations and goes all the way back to England in the late 17th century to cover losses due to fire. Over time, capital requirements for insurance companies became quite large and most insurance companies have adopted the model of a “stock insurance company” (an insurance company that is owned by investors who have purchased company stock).

While any profits earned by a mutual insurance company benefit policyholders (either through distributions or reduced future premiums), any profits generated by a stock insurance company are distributed to the investors without necessarily benefiting the policyholders.

Hugh Karp, the founder of Nexus Mutual, believes that blockchain technology in general, and the power of the Ethereum platform in particular, can revive the idea of a mutual insurance and create an alternative risk sharing platform.

Here’s how it works:

• Everyone can become a member of Nexus Mutual by buying the NXM token. Building a mutual insurance on the blockchain makes it much easier to collect and manage the capital of members and manage the community of those members. The token purchase is based on a bonding curve concept enabling a continuous building up of the capital pool (versus a one-time large raise through an ICO or similar).
  
• Nexus Mutual uses this capital pool to provide cover for smart contracts so that anybody can secure risk and potential bugs in smart contract code. In the future, Nexus plans to offer crypto wallet coverage, as well as more standard products, like earthquake coverage.
  
• Members of Nexus Mutual with specific insights / knowledge on smart contract risks can stake their tokens against specific smart contracts, signalling their confidence that a specific contract has a lower risk of being hacked than the average smart contract.

We’re participating in Nexus alongside 1confirmation and Blockchain Capital and are excited about being part of bringing insurance back to the people. And if you want to get involved with Nexus, please consider joining their Discord.