The DeFi insurer’s capital pool has been approved by the Nexus Mutual DAO for the allocation of 15,348 ether (ETH), roughly $29 million at the time of writing.
Details from the voting website show that practically all voters approved with the vote’s outcome. However, the DAO’s level of engagement fell short of the necessary quorum. The vote has to be approved by the advisory board of Nexus Mutual as a result.
The proposal to invest 10% of the Nexus Mutual Treasury in Maple Finance in order to gain yield served as the basis for the vote. Since its founding in May 2019, Maple Finance, a DeFi lender, has made crypto loans totaling more than $1.5 billion. This money will be invested by Nexus Mutual in the Maple Maven 11 Capital wrapped ETH (WETH) pool. One of the pool delegates on Maple Finance is the digital asset company Maven 11.
This investment will allow Nexus Mutual to receive a yield on its ETH holdings
Only 20% of the ether in its capital pool, according to the proposal document, is producing income for the DeFi insurance. This 20% is derived from staked ETH holdings owned by Nexus Mutual.
On the ether tokens it lends to Maple Finance via the Maven 11 WETH pool, Nexus Mutual will get up to a 9% yearly dividend. The 4% profit from the ETH lending alone will be offset by the 5% gain from MPL rewards from token lending on Maple. MPL is the native token of Maple.
The idea is that Nexus might benefit financially from the MPL incentives. Selling the MPL awards would be one method to achieve this and guarantee returns remain at a minimum of 9%. As an alternative, Nexus can stake the MPL to obtain staked MPL (xMPL), which can provide the DeFi insurer with additional yield.
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