When you deposit crypto assets into a single protocol, your funds are exposed to a variety of risks within that protocol.
When you have crypto assets deposited in a protocol that is deployed on Ethereum, an EVM-compatible network, or an Ethereum Layer 2, Protocol Cover protects against the following risks:
- Code being used in an unintended way (e.g., exploits, hacks)
- Economic design failure
- Severe oracle failure
- Governance attacks
Nexus Mutual's claims assessors use this cover wording as a reference when considering any claim.
When someone who holds Protocol Cover suffers a loss of funds, they can file a claim, as outlined below, and claims assessors will review the claim submission to determine whether the claim is valid.
For Protocol Cover claims, on-chain proof of loss is required. A member will file a claim and either sign a transaction using their affected address or send a 0 value transaction with their affected address to prove they own and control that address.
Once a member proves they own and control the affected address, claims assessors can review the on-chain history associated with that address to determine:
- If funds were deposited when the loss event occurred
- If the cover was active when the loss event occurred
- If the member suffered a loss of funds and, if so, the amount of funds that were lost
After an exploit occurs, you will need to wait 72 hours for the cool-down period to pass. The cool-down period only applies for Protocol Cover claims.
- If you hold Protocol Cover at the time the exploit occurs, you can submit a claim with supporting evidence, otherwise referred to as proof of loss.
- You will choose to either sign a message from the affected address or send a 0 value transaction from the affected address to prove you own and control the affected address.
- You will be able to include written details, links to supporting documentation, and/or upload screenshots or other files in the Incident Details portion of the claim submission process.
- Claims assessors will review, discuss, and vote to approve claims where proof of loss shows that you have indeed suffered a loss of funds.
- If the claim is approved, you will received your claim payment.
- If the claim is denied, you will be able to file another claim with more supporting evidence.
Members have paid $8.24m to cover holders who suffered a loss due to past exploits and technical failures.