Native Insurance Broker Goes Live with $2.6 Million of Seed Funding Led by Nexus Mutual
The wait is finally over for a dedicated crypto insurance broker that has been in the works to address the chronic underinsurance problem plaguing the industry. Native, backed by Nexus Mutual, has officially gone live with an impressive $2.6 million seed funding led by the decentralized alternative to traditional insurance geared towards risks involving digital assets.
Native’s Mission to Increase Insurance Capacity
According to an interview with Native co-founder and CEO Ben Davis, the firm’s primary goal is to help solve the chronic underinsurance problem in the crypto industry. Currently, about 1% of crypto assets are insured today, which is a far cry from the traditional world where approximately 7% of GDP is insured.
Addressing the Underinsurance Problem
To tackle this issue, Native has built a commercial insurance broker on-chain, which is what the market has been missing. The aim is to increase capacity by connecting businesses with Nexus’s capital pools while giving clients the ability to pay in crypto or be paid in crypto if there is a claim.
Native Goes Beyond Distribution
In addition to distribution, Native will also run a capital pool on Nexus, which means the firm will be involved in underwriting as a managing general agent (MGA) positioned on top of Nexus Mutual. This sets it apart from other insurance brokers that only focus on distributing policies.
Nexus Mutual’s Success Story
Since its inception in 2019, Nexus Mutual has underwritten about $5 billion of crypto assets and paid out $18 million in claims. The protocol allows its members to deploy assets into syndicates, similar to how the Lloyd’s of London market operates, for which they receive NXM tokens.
The Benefits of Being an NXM Token Holder
These tokens are then used to back certain risks. Like being a Lloyd’s investor or "Name," there is a risk attached to this, but yields can reach around 25%, according to Nexus Mutual founder Hugh Karp. "We understand crypto native risks better than anyone else and we’ve got a large amount of capacity that’s specifically looking to deploy into crypto risks and crypto businesses."
A Large Amount of Capacity
Nexus Mutual has an enormous amount of capacity, which is specifically designed for crypto risks and crypto businesses. This sets them apart from traditional insurance companies that are still experimenting with this space.
Base DeFi Pass – Nexus Mutual’s Insurance Alternative on Coinbase’s Layer 2 Network
In addition to Native, Nexus Mutual’s insurance alternative is also available through many of the main protocols on Coinbase’s layer 2 network via a product called Base DeFi Pass. This innovative product was created by crypto insurance startup OpenCover and offers users a "set and forget" option where one set of cover is all that’s needed across a range of applications.
Base DeFi Pass Covers High-Profile Protocols
The type of risks covered include smart contract code bugs, exploits, and hacks, while things like phishing attacks are excluded, as are losses related to market price movements of assets used or relied upon by the covered protocol. Base DeFi Pass covers a clutch of high-profile protocols on Base, including Uniswap, Compound, and Morpho.
A Safer Ecosystem for Users
In order to bring lots of people on-chain, Base needs to make those users feel confident about interacting with DeFi. OpenCover’s Base DeFI Pass adds an extra safety net, so people can feel more secure and protected when they participate in the open DeFi ecosystem on Base.
Conclusion
The introduction of Native insurance broker and Nexus Mutual’s expansion into Coinbase’s layer 2 network via Base DeFi Pass are significant developments for the crypto industry. These initiatives aim to increase insurance capacity and provide users with a safer ecosystem for participating in decentralized finance (DeFi). With an impressive $2.6 million seed funding, Native is well-positioned to tackle the chronic underinsurance problem plaguing the industry.