The Nexus Wrapper was created by Nexus Mutants who wanted the option to wrap NXM into a token that could be traded on decentralised exchanges and centralised exchanges.
The Nexus Wrapper application was created by the PepperSec team.
Both the Nexus Wrapper and the wNXM token are community managed. The mutual provides links to provide information regarding the Nexus Wrapper and wNXM but the mutual does not manage the Wrapper or the wNXM token.
Purpose
Only Nexus Mutual members can purchase, hold and use NXM. You can read about the NXM Token Model for more details.
When the capitalisation ratio (MCR% = ETH in Pool / MCR) is <=100%, NXM to ETH redemptions are prohibited. This ensures we have adequate capital to pay claims.
The Nexus Wrapper allows members to wrap their NXM so it may be sold outside of the mutual (i.e. not through the bonding curve).
What is wNXM?
wNXM is a 1-to-1 backed token that can only be generated by wrapping genuine NXM.
NXM can only be traded among members, wNXM is fully tradeable but can't be used at all within the Nexus Mutual platform.
NXM can only be purchased via our app (app.nexusmutual.io) as it isn't listed on any exchanges. NXM can only be held and traded by members of the mutual.
Nexus Mutual uses a continuous token model, also referred to as a bonding curve. This means tokens can be purchased at any time but at a variable price. This contrasts to more common ICO-type approaches where there is a fixed purchase period with set price change points, followed by a speculation-driven market on exchanges.
The token price varies based on two primary parameters:
1.
the funding level of the mutual; and
2.
the amount of capital required to support the covers written.
The main driver of the relative short-term price is the funding level of the mutual, reflecting the immediate financial position and encouraging re-capitalisation when funding levels are low. In the long term, the required capital to support the covers will rise to reflect the adoption of the platform.
For greater detail, you can read about the Token Model.
What Determines wNXM Price?
When wNXM is sold on decentralised exchanges and centralised exchanges, the price is subject to market forces.
While wNXM is backed 1-to-1 with genuine NXM, the two tokens are shaped by different factors. This can result in a price disparity under certain conditions.
Improvements to Nexus Wrapper Application
Because the Nexus Wrapper application is community managed and run, our members can submit grants if they believe the application could be improved.
Nexus Mutant Jack was awarded a grant to upgrade the Nexus Wrapper on 7 April 2021. You can review the details of his grant award in the Use Cases: Successful Grants section.