Nexus Mutual

When weak price feeds are used, loss events like the SK Hynix event in Hyperliquid's permissionless HIP-3 markets are the result. This isn't a new lesson for onchain traders; just a reminder to learn from previous cycles. Between 2020-2022, oracle-related loss events were a major contributor to overall onchain losses. Creating oracles with robust, secure price feeds for onchain markets that trade 24/7 is crucial as the RWA-adoption wave continues to grow. Nexus Mutual's Protocol Cover was designed with these lessons in mind to protect onchain traders against losses caused by Oracle Failure. Read our report below on how this loss event happened and how we at Nexus Mutual would have covered traders against those losses.

One incorrectly priced share of SK Hynix triggered $57 million in liquidations on Hyperliquid At the Korean pre-market open on July 28th, an order error on NXT executed a single share around 30% below the previous close Trade XYZ's oracle read that print as the reference price for the xyz:SKHYNIX perpetual market, and seven seconds later the liquidations began 960 long accounts were closed out for $17.3 million in realized losses. The oracle recovered within two minutes, but the liquidations were final Nothing was stolen and no contract was exploited It was an oracle configuration problem, due to no outlier rejection, trade-size weighting, or sanity check against the prior close Would this have been a covered event? Yes. The Hyperliquid Core Protocol Cover Annex names HIP-3 Trade[XYZ] Perpetual Markets, and Oracle Failure is a Covered Event under Nexus Mutual Protocol Cover Trade XYZ said it will reimburse eligible losses as a "one-time discretionary decision" With the speed that DeFi moves at, small errors can trigger large losses within seconds That’s why thousands of investors, protocols and funds have trusted Nexus Mutual to protect their digital assets against the unexpected https://lnkd.in/gF2ARXER

One of the challenges in DeFi risk is how interconnected everything can be Kathryn Dodds with gunnercooke sat down with Hugh Karp and Ania S. to talk onchain risk, traditional insurance, AI and more Stay tuned for the full episode...

Catch up on the latest major onchain security incidents from last week 👇

Real-world assets have grown 10x over the last few years to a market cap of nearly $30 billion This makes tokenized stocks, treasuries and commodities a fixture in #DeFi rather than a fad However, it all rests on getting a real-world price onchain accurately, and some recent losses in the space have shown that can be a risky proposition Whether it’s due to oracle failure, manipulation, misconfiguration, or a smart contract exploit, every link in the pricing chain is a potential flaw What are the real risks behind #RWAs, and how can you manage it? Check out our blog to find out! https://lnkd.in/ghU_pGpX

Peg stability is what makes a stablecoin a stablecoin. Frankencoin is designed to maintain its peg. Period. Yet we always want to go a step further. With this, Frankencoin has become the first non-USD stablecoin you can get depeg cover for. Powered by Nexus Mutual and OpenCover.

Depeg Cover is now available for Frankencoin Association users. Users can now add protection against defined depeg events through OpenCover. Built by OpenCover, underwritten by Nexus Mutual. Protect your ZCHF with OpenCover ⤵️

Our CIO, Steven Wisbrun, contributed to Nexus Mutual's latest article on crypto insurance, sharing M1 Capital's perspective on underpriced risks, the importance of OpSec, and why institutional portfolio managers should have insurance.

The Onchain Security Roundup tracked 6 major incidents last week, with over $28.3M in reported losses As smart contract security improves, attackers are going after the underlying economic assumptions (oracles, liquidity depth, mark prices) rather than the contracts themselves Ostium: 23.75M USDC drained from its LP vault after offchain price-feed infrastructure was compromised. Blockaid reported that a registered PriceUpKeep forwarder and future-dated authorized oracle reports were used to create artificial trading profits to extract funds from the OLP vault. Trading remains paused, with investigation and LP recovery details pending Allbridge Core: $1.65M lost from a flash-loan-assisted manipulation of Allbridge's StableSwap-style automated market maker, where the attacker exploited the same-asset swap accounting divergence. The protocol paused and asked LPs in affected pools to withdraw while the investigation continues Cascade CLS Vault: $1.3M lost after thin-liquidity markets and manipulated mark prices triggered liquidations against the CLS vault. Trading and withdrawals remain paused BarnBridge SMART Yield cUSDC: $776K drained from a dormant protocol after a governance takeover allowed the attacker to use legacy USDC approvals DeFiTuna: $570K lost from a Solana lending-pool issue involving a highly illiquid TUNA/USDC pool, Jupiter routing, and a rounding/solvency-check flaw. DeFiTuna said the vector was identified and mitigated, with investigation and recovery ongoing Lumi Finance / Sodium Smart Accounts: approximately $270K drained after a design flaw in smart-account validation logic allowed an attacker to gain unintended token approvals These are the exact sorts of risk that Nexus Mutual can cover: oracle failures, oracle manipulation, governance takeovers, and smart contract exploits Whether you’re a protocol, investor, or fund looking for protection against the changing risks in DeFi, Nexus Mutual is there to help