Decentralised insurance protocol Nexus Mutual has integrated with Symbiotic, a restaking protocol, to create a yield-generating reinsurance layer for underwriting decentralised finance (DeFi) risks. This collaboration aims to address a significant gap in DeFi risk coverage: the lack of scalable and transparent reinsurance infrastructure.
Symbiotic, designed to compete with EigenLayer, allows capital allocated to it to simultaneously secure traditional proof-of-stake (PoS) networks and underwrite Nexus Mutual coverage. This integration enables real-time capital reallocation and swift claim settlements, offering a more efficient and scalable alternative to traditional models, according to a press release.
“For years, on-chain risk markets have struggled to scale due to fragmented capital pools,” said Misha Putiatin, co-founder of Symbiotic. “By introducing composable underwriting infrastructure, we’re enabling scalable, permissionless risk markets where capital can flow seamlessly across multiple layers of the ecosystem. This isn’t just about improving efficiency; it’s about achieving real scalability.”
Nexus Mutual aims to address the insurance capacity shortage within the crypto industry by allowing members to pool assets into syndicates, much like the Lloyd’s of London model. Members receive NXM tokens, which are used to back certain risks in exchange for yields that can reach up to 25%, according to founder Hugh Karp.
The partnership with Symbiotic not only expands Nexus Mutual’s capacity for underwriting across more protocols and asset classes but also ensures the protocol can meet the growing demand for DeFi coverage without raising idle reserves.
“As institutional adoption of DeFi grows, investors are demanding coverage on a larger scale,” said Karp. “Working with Symbiotic enables us to offer on-chain cover solutions that meet the needs of institutional investors and protocols alike.”