The challenge

Nexus Mutual is the industry leading provider for on-chain cover. Much like traditional insurance companies, Nexus Mutual allocates idle crypto assets held in its Capital Pool to generate returns that offset future claim payouts and increase value for Mutual members. The assets held in Nexus Mutual’s Capital Pool back $NXM, its native governance and utility token. Since 2021, Nexus Mutual members have voted to allocate ETH to liquid staking protocols with liquid staking tokens (LSTs) such as Lido’s stETH and Rocket Pool’s rETH.

Both of these LSTs have deep onchain liquidity and are supported by the Chainlink standard for verifiable market data Price Feeds, which the Mutual uses Chainlink Price Feeds to calculate the value of the assets backing the $NXM token. ETH staking has provided the Mutual with a low-risk allocation solution that generates consistent returns over time.

But here comes the problem, some ETH staking solutions are not LST-based, or the LST doesn’t have a reliable price feed. This poses a significant challenge for Nexus Mutual, as they need, like any reasonable investor to diversify its portfolio to mitigate risks.

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The solution

Nexus Mutual has chosen to use Enzyme.Blue to launch the Nexus Mutual Treasury Yield, a move that addresses two critical strategic priorities.

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1. Leveraging Enzyme.Blue—an all-in-one platform—Nexus Mutual gains access to a broad universe of DeFi protocols and assets within a unified environment. This streamlines both portfolio management and share valuation. Through the Treasury Yield initiative, they can now allocate capital across multiple strategies, including niche opportunities, without needing to interact with each protocol individually or manage analytics in-house. With industry-grade security and flexible configuration options, Nexus Mutual has seamlessly built and managed a private vault using the Enzyme.Blue app—saving significant time, resources, and operational overhead.

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2. Accurate, reliable price data is a vital requirement for the on-chain economy. Because the NXM token’s value is calculated based on the value of assets held in the Capital Pool, the potential to allocate more crypto assets into ETH staking strategies is limited to LSTs with deep liquidity and supported by reliable Chainlink oracles. Unreliable price data for such assets could cause the NXM token’s price to fluctuate, impacting the Mutual’s capacity calculations, cover quotes, and other internal functions.

Instead of squandering engineering resources and hindering development efforts for the Mutual’s core product offering, Nexus Mutual was able to work with Enzyme and Chainlink Labs to integrate Chainlink Proof of Reserve into the Mutual’s Enzyme Vault to calculate the value of the assets within the vault, which allows the Mutual to ensure that pricing data for the vault token (NXMTY) accurately relays the value of allocation strategies in ETH staking platforms.

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The result

With the Nexus Mutual Treasury Yield, Nexus Mutual can efficiently manage over $60M in TVL, access higher-yield strategies for its Capital Pool float, and simultaneously continue sourcing cover capacity, providing cover quotes, and accurately valuing the assets backing each $NXM token.

One size doesn’t fit all. Enzyme’s philosophy focuses on delivering financial flexibility and a wide array of options, enabling users to tailor solutions to their unique needs. This approach has enabled us to support the leading on-chain cover provider, offering a good example of how the versatility of our infrastructure enables Enzyme Vaults to seamlessly and precisely put Cover Capital to work as well as the importance of cutting-edge oracles to ensure Price Feeds precision.

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