The decentralized insurance platform, Nexus Mutual, has announced the payment of its first claims to victims of bZx hacking attack, CoinDesk reports.
The crypto insurance firm based in London operates like a cooperative (like other firms bearing ‘mutual’ within their names). In this regard, there have been widespread concerns if indeed the firm’s members will eventually agree to pay out claims which are valid. However, following a thorough analysis of bZx’s attack and the release of the results on Monday, the company agreed to pay out two claims which are estimated to be worth $31,000.
Hugh Karp, Nexus Mutual founder explained that it is not a good thing that ordinary crypto investors are losing their funds through hacking, but the payment proves that Nexus’ system actually works.
Mutual insurance companies give the policyholders the powers to control the insurance pool. As per the Nexus Mutual case, this means that policyholders vote to decide whether the claims should be paid out or not. The mutual account has funds that are owned by individuals who own the NXM (Nexus) token. The current payment was the second try after the NXM holders voted not to pay out during the first voting.
One of the first investors of Nexus Mutual, Lasse Clausen from 1kx Capital, expressed his gratitude that the policies had been honored. He stated that the payment will lead to more people trusting the company. He added that more people in the industry are likely to insure their smart contracts following this pay out.
The venture-backed firm, boasts of such investors like Blockchain Capital as well as 1confirmation, was launched in May last year.
At the moment, people are free to take out policies to safeguard against a genuine Ethereum-based smart contract. These policies can be described like bets against if or not a given smart contract is bound to fail for a particular reason. If an exploit or attack happens on a given smart contract where mutual members gives a nod that it is a representation of a smart contract failure, then such policy is paid out.