NXM is the governance and utility token of the Nexus Mutual protocol. It is used to balance the marketplace for insurance products.
NXM is a low-cap asset that represents the protocol's native governance or utility token. This asset is exposed to the underlying risks of Nexus Mutual, a protocol rated as Best in Class. NXM is the utility and governance token of Nexus Mutual. Holders vote with their tokens on which protocols are safer, creating an insurance marketplace. The asset has an uncapped supply.
NXM is moderately correlated to the overall market.
NXM is the governance and utility token for the Nexus Mutual platform. It provides users with membership rights to the platform as well as represents a claim over the underlying assets of the protocol, or the Capital Pool. The token is required to use all aspects of Nexus Mutual's operations. This includes staking NXM to vote on claim assessments and provide insurance for smart contract covers.
NXM has an elastic token supply with no fixed cap. NXM is minted when someone buys and burnt when someone sells. At launch, the Nexus team created an initial supply of 3M tokens. The tokens were distributed as follows: 1M allocated to the Nexus Mutual Foundation, 1.3M to the team, and 700K to seed investors.
NXM has intrinsic value given its ownership claim over the protocol's Capital Pool. The token price is directly linked to the performance and financial stability of the platform. NXM uses a bonding curve to determine its price, which means its value rises and falls deterministically based on its Capital Pool and the Minimum Capital Requirement (MCR). The Capital Pool refers to the funding level of the protocol, while the MCR refers to the amount required to cover all claims. If demand for cover increases, then the NXM token price should rise as there is more demand to purchase the token to pay premiums and more capital is need to cover the increased cover demand. Conversely, when claims are paid out, the Capital Pool shrinks which leads to a decrease in token price.