The Step-by-Step Guide to Securing Your Funds with Nexus Mutual Hodlnaut Cover
One of the most common concerns that users face when using Cefi platforms for yield generation is the security of their funds, especially when a popular mantra in the crypto community goes “not your keys, not your crypto”. We fully understand why some users face anxiety when handing their funds over to a Cefi platform like Hodlnaut. We have committed about $1M of our equity to become a member of Nexus Mutual and made insurance affordable for our users.
If you’re looking for a step-by-step guide on how to buy insurance on the funds that you’ve placed with Hodlnaut, you’re in the right place! In this guide, we will provide you with a step-by-step guide on how to purchase insurance with Nexus Mutual.
How you can benefit from this partnership:
As a Hodlnaut user, you can now purchase insurance on the funds that you place on our platform. This optional insurance cover functions as an additional safeguard that you can take, should you be afraid that your funds may be lost when you leave them with us. At an affordable premium of 2.6% p.a., you can earn while you sleep peacefully.
When can you make a claim against your insurance:
There are 2 events in which you will be eligible to make a claim. These are either:
- Hodlnaut gets hacked and when you lose more than 10% of your funds; or
- Withdrawals from Hodlnaut are halted for more than 90 days.
Here’s how you can purchase Hodlnaut Custody Cover insurance on Nexus Mutual:
1. Head over to https://app.nexusmutual.io/cover
2. Connect your crypto wallet to Nexus Mutual via Metamask or Wallet Connect
3. Once your wallet is connected, go to https://app.nexusmutual.io/cover/buy/get-quote?address=0xC57d000000000000000000000000000000000006
4. Enter how much cover you would like and for how long. Then click on ‘Get a quote’.
Note that you can purchase cover in ETH or DAI. In the event of a successful claim, you will be paid out in the currency you select here. If you hold BTC on Hodlnaut, we recommend buying cover in ETH as it’s the most closely correlated asset in terms of price. If your claim is successful, you can use the ETH to repurchase BTC.
Here is a sample calculation you can do to figure out how much ETH coverage you should be purchasing to insure your BTC holdings with Hodlnaut, assuming the following:
- BTC holding with Hodlnaut: 100 BTC
- Price of BTC: $55,000
- Price of ETH: $1,700
- Calculation for how much ETH cover to buy: (100 BTC * $55000) / $1700 ≈ 3236 ETH
- According to these assumptions, you should be buying cover for about 3236 ETH, and this should be input into “Amount” under “Cover details”.
4a. Once you have input the relevant information under “Cover details”, your quote can be found on the right-hand side.
4b. If you are not already a member of Nexus Mutual, this is where you can sign up. Becoming a member takes about 10 mins to complete the application and membership is usually approved on the same day or within 24 hours.
Once you become a member you will be able to complete the process of purchasing coverage.
5. If you are happy with the quote, click on “Continue”. Reading the Agreement terms and tick the necessary boxes.
6. Once you have agreed to the terms, the “Buy cover” button will be enabled.
7. Click on “Buy cover” and you will be prompted to approve several transactions in the next step:
7a. Transaction to approve NXM.
7b. Buy cover.
7c. [If the cover is being bought in DAI, approve DAI.]
8. Once you have approved the necessary transactions, you will now be covered by Nexus Mutual’s Hodlnaut Custody Cover!
What’s to come:
Hodlnaut will be working with iTrust in the near future to integrate the purchasing of Hodlnaut Custody Cover directly on the Hodlnaut platform. This will make the purchasing of insurance a more seamless experience for our users. Follow us on our social media platforms and stay tuned for the latest updates!