Nexus Mutual provides custodian insurance, users who lose more than 10% of their funds can claim

Original title: "Nexus Mutual provides custodian insurance, users can claim for losses exceeding 10% of funds"

Original source: Babbitt

Cryptocurrency investors can now purchase deposit insurance on centralized exchanges through Nexus Mutual. Members who have verified their identity with Nexus can purchase insurance claims on designated centralized custodians, including Celsius, BlockFi, Nexo, inLock, Ledn, and Hodlnaut.

NXM holders are also able to stake tokens on behalf of these custodians, essentially showing that these custodians are safe and guaranteed against breaches. 50% of the funds for each insured will be distributed proportionally to the stakers of this contract.

Policyholders are subject to a hack if they lose more than 10% of their funds, or if withdrawals from the custodian are suspended for more than 90 days right to file a claim.

The most notable example is the recent hack of KuCoin, which lost over $150 million in funds, most of which have since been recovered.

According to Nexus Tracker, Nexus Mutual currently has $57 million in outstanding insurance against $96 million in ETH's pool. While these custodians hold funds many times over the total amount of insurance available, this service marks a step in the right direction for DeFi to play a critical role in protecting users from custody risks.

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