BIP #11 - Nexus Mutual Cover for B.Protocol smart contracts

This is a re-vote of BIP #9 with minor adjustments in the proposal to keep the insurance relevant for any B.Protocol integration that would require coverage.

Intro

This proposal suggests B.Protocol DAO to allocate 10,000 BPRO (~$70,000 at time of writing) from its reserve to a Shield Mining campaign on Nexus Mutual in order to increase cover capacity and lower cover cost for B.Protocol integrations.

Background

The Shield Mining Campaign is a tool created by Nexus Mutual as an additional incentive for underwriters to stake their NXM on specific contracts (e.g. B.Protocol-Liquity integration) which can assist in bringing the insurance cost on Nexus Mutual to the lowest target rate possible of 2.6% annually.

As TVL is growing, and as security and safety of users’ funds remain at the top priority of the community, insurance coverage seems like the right step at this stage.

Nexus Mutual is the leading insurance provider for DeFi protocols with nearly $600m of active covers currently.

Motivation

Insurance provides users, mainly big accounts but not only, the needed reassurance that their funds are safe. This can increase the stickiness of funds in the protocol as well as attract new users.

As B.Protocol grows into new integrations, this proposal suggests having a cover for its smart contracts to attract new users.

Details

After discussions with the Nexus Mutual team, the proposal is to distribute 10,000 BPRO as part of the Shield Mining Campaign. This should be enough rewards to keep the campaign running for 4-6 weeks and to attract sufficient capital to bring the price down to 2.6% annually (a minimum of 50k NXM is required to be staked to get the minimum price for cover).

Result

If the Snapshot vote will pass, 10k BPRO from the DAO reserve will be allocated into a Nexus Mutual Shield Mining Campaign to incentivize risk assessors to stake their NXM on B.Protocol smart contracts cover. Dates of the campaign as well as the listing of B.Protocol on Nexus will be finalised with the Nexus team if/once passing the Snapshot vote.