StakeWise Purchases Slashing Cover From Nexus Mutual
We are happy to announce that StakeWise has purchased cover for all its validators from Nexus Mutual, the leading provider of crypto protection. As a result, all capital deposited and earned via StakeWise Pool is now protected against slashing and associated losses, making our protocol considerably safer to use and ensuring that the 1:1 backing of StakeWise tokens with ETH is maintained. The cover has been purchased for 3 months as an initial trial period.
This coverage from Nexus will compensate for any penalties, downtime or slashing that could be experienced by StakeWise or its node operators as a result of infrastructure and setup failure. It will also cover for the loss of staking income from the slashed and exited validators, until 17 October 2022. This will ensure that stakers’ income will be minimally affected by the slashed and exited validators. The cover doesn’t protect against the losses experienced in catastrophic scenarios (e.g., mass slashing in the network due to ETH2 client failure).
The coverage cap has been set to 3 ETH per validator, which according to the team’s calculations is roughly double the size of maximum potential loss that StakeWise would experience amid a simultaneous slashing of all the protocol’s validators. As the size of maximum potential loss will increase with the number of validators created by the protocol, the StakeWise team will gradually upgrade to a policy with a larger cap (5 ETH) as our protocol continues to grow. In both cases, StakeWise’s own liability will be limited to 0.25 ETH per validator.
The full text of the policy can be found here.
The StakeWise team has worked closely with the Nexus Mutual team to ensure our validator network has comprehensive protection against slashing risk. With this innovative product, both protocols want to signal their commitment to making DeFi safer and easier to use. Our teams want to make ETH2 staking accessible for individuals concerned about the safety of funds deposited into DeFi.
We would like to thank the Nexus Mutual team for creating this cover and tailoring the program to StakeWise’s needs, once again proving their status as the leading decentralized protocol for crypto protection. We look forward to continued collaboration, so StakeWise can take part in securing the Ethereum network through Proof of Stake and Nexus Mutual can protect Ethereum validators with their market leading ETH2 Staking Cover.