Is Nexus Mutual (NXM) A Good Investment?

Introduction

Launched in May 2019, Nexus Mutual is a decentralized insurance protocol built on Ethereum. It offers users the ability to take out covers on smart contracts through the usage of its native token NXM.

Nexus Mutual uses a risk-sharing pool that allows anyone to purchase insurance coverage or contribute their capital to the pool for future rewards. Nexus Mutual tries to disrupt the insurance industry by transitioning the power over the pooled resources to the individual people. Anyone is allowed to participate, as the mutual is owned by its members. Users can contribute Ethereum (ETH) to the pool for NXM.

Nexus Mutual's first product, "Smart Contract Covers," helps members of the mutual protect themselves from smart contract vulnerabilities. The platform's native token, NXM, can only be purchased on Nexus Mutual and token holders are also technically members. So far, the crypto-based insurance experiment has worked as advertised, as well as made a few NXM holders quite rich.

How Does the NXM Token Work?

The NXM token can only be purchased through the Nexus Mutual platform. It is not for sale on Uniswap, Binance, or any other trading platform. 

The token economics for this cryptocurrency is designed so that all value created is a function of the health of the platform. Though the token’s price is technically market-driven, the formula is slightly more complicated than simple supply and demand. This is the equation:

The MCR is the level that defines whether all claims on Nexus Mutual can be fulfilled or not. The higher this value, the higher the probability that all claims can be paid. So, the more funds that are on the platform, the more expensive the token will be. 

And as every token holder is also a member of the platform, individual members benefit from the success of the whole. As the platform becomes richer, so too do all of its members.

This particular token model has earned the attention of many DeFi advocates. At the time of press, NXM is trading at $46.66 and is up nearly 330% over the past month.

Financial Analysis:

Nexus Mutual price today is $142.83 with a 24-hour trading volume of $1,140. NXM price is up 5.3% in the last 24 hours. It has a circulating supply of 6.9 Million NXM coins and a total supply of 6.9 Million. At the time of writing this post (Oct 14, 2021), Nexus Mutual's Return On Investment (ROI) over the past year was 272%, way over its similar projects' ROI that saw an average ROI of 268%. However, it underperformed compared to the market's top 1500 project with an average ROI of 12,809%.

Another critical factor in the success of any project is gaining public attention. Our data shows that Nexus Mutual's Twitter account saw a growth of 24% over the last months in the number of followers, which is considerable. However, the Telegram channel users had 6% growth over the last months.

Over the last five months, Nexus Mutual's market capitalization rank followed an overall declining trend, starting at the rank of 90-93 on July-Aug 2021, reaching 123 in the last weak od Sep 2021. However, by the time of writing this post, Nexus Mutual's market cap rank is about 111, and its value is about $950,599,492 million. Moreover, its liquidity score is 4% under the market's average score, making it relatively more difficult to sell in bear markets.

You are saying that Nexus Mutual (NXM) is the best cryptocurrency to invest in?

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