Wrapped NXM (WNXM)
Wrapped NXM (WNXM) is a tokenized version of the NXM token, which is used within the Nexus Mutual ecosystem. Nexus Mutual is a decentralized insurance platform that offers coverage against smart contract failures, exchange hacks, and other risks within the blockchain space. Wrapped NXM allows users to trade NXM tokens freely on decentralized exchanges by wrapping the native NXM into an ERC-20 token.
Wrapped NXM overview
| Ticker | WNXM |
| Website | https://nexusmutual.io/ |
| @NexusMutual | |
| Contract Addresses | |
|---|---|
| ethereum | 0x0d438f3b5175bebc262bf23753c1e53d03432bde |
Understanding the Nexus Mutual platform
Nexus Mutual is built on Ethereum and operates as a discretionary mutual, meaning that it is owned by its members who share the risks and benefits of the community. The platform aims to leverage the transparency and security of blockchain technology to offer more flexible and inclusive insurance products compared to traditional insurance providers.
Key features of Nexus Mutual
Community-driven model: Nexus Mutual allows members to collectively assess and decide on claims, ensuring that decisions are made in the best interest of the community.
Risk assessment and coverage: Members can purchase coverage against various risks, such as smart contract vulnerabilities and exchange hacks. The platform uses a risk assessment model to determine the cost of coverage.
Capital provision and rewards: Members can contribute capital to the mutual, which is used to pay out claims. In return, they receive rewards in the form of NXM tokens.
The role of NXM and Wrapped NXM
NXM is the native token of the Nexus Mutual platform and plays a crucial role in governance, risk assessment, and claims processing. However, NXM tokens are only accessible to members of Nexus Mutual and cannot be traded freely on exchanges. Wrapped NXM addresses this limitation by allowing NXM tokens to be wrapped into an ERC-20 compatible token that can be traded on decentralized exchanges.
Benefits of Wrapped NXM
Liquidity provision: By enabling trading on decentralized exchanges, Wrapped NXM increases the liquidity of NXM tokens, making it easier for users to enter and exit positions.
Broader accessibility: Wrapped NXM allows non-members to gain exposure to the Nexus Mutual ecosystem without needing to join the mutual, thereby broadening the potential user base.
Decentralized exchange compatibility: As an ERC-20 token, Wrapped NXM can be used in various decentralized finance (DeFi) applications, providing additional utility and integration opportunities.
How to use Wrapped NXM
Using Wrapped NXM involves a straightforward process of wrapping and unwrapping NXM tokens. Members of Nexus Mutual can wrap their NXM tokens into WNXM, allowing them to trade or use them in DeFi applications. Conversely, WNXM tokens can be unwrapped back into NXM, enabling holders to participate in the Nexus Mutual ecosystem.
Steps to wrap and unwrap NXM
Wrapping NXM: Members need to send their NXM tokens to a smart contract that mints an equivalent amount of Wrapped NXM. This process involves paying a small gas fee on the Ethereum network.
Unwrapping WNXM: Holders of Wrapped NXM can convert their tokens back to NXM by interacting with the smart contract, effectively burning the WNXM and releasing the original NXM tokens.
Governance proposals and voting
Proposal submission: Members can submit proposals for changes or improvements to the platform. These proposals are subject to discussion and refinement within the community.
Voting process: Once a proposal is finalized, NXM holders can vote on its implementation. The outcome is determined by the majority vote, with the weight of each vote proportional to the number of NXM tokens held by the voter.