Wrapped NXM (WNXM)
Nexus Mutual is a decentralized platform that provides insurance solutions through smart contracts. It uses a unique token system involving NXM and its wrapped version, wNXM, to facilitate transactions and participation within its ecosystem. This article explores the functions and purposes of NXM and wNXM, highlighting their roles within the Nexus Mutual protocol.
Understanding the Nexus Mutual protocol
Nexus Mutual operates as a decentralized autonomous organization (DAO) that offers insurance alternatives using blockchain technology. The platform aims to provide coverage for smart contract risks, offering users protection against potential vulnerabilities in decentralized applications (DApps). Nexus Mutual leverages the Ethereum blockchain to ensure transparency, security, and decentralized governance.
| Ticker | WNXM |
| Category | Crypto-Backed Tokens |
| Website | https://nexusmutual.io/ |
| @NexusMutual | |
| Contract Addresses | |
|---|---|
| ethereum | 0x0d...de Copied! |
The role of NXM token
The NXM token is a crucial component of the Nexus Mutual protocol, designed for internal use within the platform. It serves multiple purposes, including governance, risk assessment, and claims management. Holders of NXM tokens can participate in the decision-making process, vote on governance proposals, and assess claims submitted by other members.
KYC requirements for NXM holders
To maintain compliance and ensure the integrity of the platform, Nexus Mutual requires all NXM token holders to undergo a Know Your Customer (KYC) process. This process involves verifying the identity of each participant, which helps prevent fraudulent activities and ensures that only legitimate users can access the protocol's features.
Introduction to wNXM
Due to the KYC requirement for holding NXM, Nexus Mutual introduced a wrapped version of the token, known as wNXM. This version allows users to own and trade the token without undergoing the KYC process, thereby increasing accessibility and liquidity.
How wNXM works
wNXM is essentially a tokenized version of NXM that can be freely traded on various cryptocurrency exchanges. To utilize wNXM within the Nexus Mutual platform, it must first be "unwrapped" into NXM by a registered member who has completed the KYC process. Once unwrapped, wNXM becomes NXM and can be used like any other token within the protocol.
Improving liquidity with wNXM
The introduction of wNXM has significantly enhanced the liquidity of the Nexus Mutual ecosystem. By being listed on popular exchanges such as Uniswap and Binance, wNXM allows users to trade the token in a decentralized manner, thereby facilitating greater market participation and price discovery.