School loan

3 reasons why Nexus Mutual (WNXM) price holds up in a volatile market

There will always be risk when interacting with cryptocurrencies, and recent evidence of this can be seen in the past few weeks after savvy hackers managed to escape with millions of dollars in tokens. of BitMart, AscendEX and BadgerDAO exchange.

Nexus Mutual is a decentralized platform that allows investors to secure insurance coverage against smart contract exploits, and today its token, WNXM, has grown 38% even as Bitcoin (BTC) and the broader crypto market continues to correct itself.

Data Cointelegraph Markets Pro and TradingView shows that after hitting a low of $ 46.59 on December 13, WNXM’s price climbed 38% to a daily high of $ 69.22 on December 14.

WNXM / USDT 4 hour chart. Source: TradingView

Three reasons for WNXM’s sudden price reversal include a series of new partnerships and integrations with the Nexus Mutual protocol, growing total value locked in the Nexus Mutual ecosystem, and the project’s ability to successfully provide coverage to victims of the disease. ‘protocol exploits, which involved the loss of funds.

Partnerships expand the Nexus Mutual ecosystem

New partnerships and protocol integration with various Decentralized Finance (DeFi) platforms appear to be one of the driving factors behind the current takeover of WNXM.

Recently, the developers behind Nexus Mutual held community calls with mStable, Balancer Labs, Alpaca Finance, Notional Finance, and PoolTogether.

The project has also seen a steady increase in the number of hedging policies purchased, and over the past week a few multi-million dollar policies have been opened on Curve, Anchor, Stake DAO, and OlympusDAO.

Week-to-week increase in Nexus Mutual policies. Source: Twitter

As the chart above shows, Nexus Mutual saw a 53% increase in the number of policies sold between November 22 and 29, and the total value of coverage offered increased by 121%. The increase in usage resulted in a 125.8% increase in premiums earned by the protocol.

Total blocked value is increasing

Total Locked-In Value (TVL) on Nexus Mutual has also increased over the past six months, and data from Defi Llama shows the metric peaked at $ 780.58 million on November 9. Currently, the TVL on Nexus Mutual stands at $ 585.33 million, reflecting the sharp decline in the market that began last week.

Total value locked on Nexus Mutual. Source: Lama Challenge

Protocol users have the option to stake NXM tokens with projects they deem secure as financial backing of the coverage provided. In return for funding the cover, users receive a return on their staked tokens and a current average APY of 4.96%.

According to data provided by the Nexus Mutual app, there is currently $ 1.1 billion in stake through the protocol, $ 25.5 million in coverage purchased, and $ 12.7 million in rewards paid.

Related: “DeFi is the most dangerous part of the crypto world,” says Senator Elizabeth Warren

Happy customers are good for business

A third reason for Nexus Mutual’s growing strength and WNXM’s price appreciation has been that victims are cured after losing money due to a smart contract exploit or hack. protocol.

One of the DeFi platforms that had Nexus Mutual coverage before a mine $ 100 million was Cream Finance, a protocol that suffered back-to-back losses in 2021 due to hacks and flash loan exploits.

Fortunately for those who had purchased coverage before the exploit, the Nexus Mutual community paid several claims for the lost funds.

VORTECS ™ data from Cointelegraph Markets Pro also began to detect a bullish outlook for WNXM on December 11 ahead of the recent price hike.

The VORTECS ™ score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points, including market sentiment, trade volume, recent price movements and Twitter activity.

VORTECS ™ score (green) against the WNXM price. Source: Cointelegraph Markets Pro

As shown in the graph above, the VORTECS ™ score for WNXM fell into the green zone on December 11 and peaked at 77 around 57 hours before the price increased 49% the following day.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move comes with risk, you should do your own research before making a decision.