Introduction

The first generation DACO Protocol

At Neptune Mutual, we aim to build the first generation DACO, a fully decentralized autonomous cover organization. From purchasing cover from a pool, reporting an incident, dispute resolution, to claims payout, everything is fully transparent and decentralized.

Neptune Mutual DAO is not a decentralized insurance protocol. The Neptune Mutual protocol is based on the parametric coverage model which is an alternative form of insurance to protect policyholders from financial risks.

Unlike a discretionary mutuals, you do not need go back and forth between the underwriters, claims assessors, loss adjusters, or any middlemen, centralized party, and privileged users to receive your claims payout. There is no need for a verification and assessment of the cover you purchased. Anyone who has cToken can fully claim the cTokens for an equal amount in stablecoin payout whenever a cover incident occurs. If a cover claim is valid for one, it is equally valid for the rest of the policyholders.

In an index-based or parametric coverage model, the trigger or incident does not necessarily have to result in your financial loss. Meaning, you can speculate or predict an incident will occur in the future if you believe so. You don't need to show any proof, upload files or screenshots, and engage with a special/privileged user to prove you were a victim of an incident and wait for a decision. If you have a cToken with an expiry date greater than the incident date, you can claim your cTokens for a USD stablecoin after the reporting period, if the resolution is in your favor. There is absolutely no wait time between filing a claim and receiving a payout. Additionally, the amount you receive is never a partial payout. You will receive payouts in full, minus protocol fees.

Through governance, the Neptune Mutual DAO can easily handle any cover situation. However, we’re only focusing on the smart contract and exchange coverage initially. The primary reason is commercial and competitive advantages and opportunities for our DAO.

Neptune Mutual vs Nexus Mutual Comparison

Topic

Neptune Mutual

Nexus Mutual

Protection Model

Parametric

Based on parameters defined in the contract. Resolution achieved via governance portal.

Open, fair, inclusive, and non discriminatory

Discretionary

Based on the discretion of special privilege users.

Closed, requires KYC and special membership, possibility of discrimination via discretion

Triggered By

Incident or Exploit → Reporting

Claim → Assessment

KYC

Not Required

Required

Proof of Loss Submission

No need

Required

Guaranteed Payout (On Positive Resolution)

Yes

No guarantee

Token Name

NEP

NXM

Maximum Supply

900,000,000 NEP

Unlimited

Supply Model

Deflationary

Inflationary

Resolution Achieved Via

Governance portal

Claims assessor's decision

Centralization Risk

Very low

Extremely high

Claims Process and Decision (On Positive Resolution)

Fast and immediate

Extremely slow and complex based on the discretion of claims assessor

Scalability

Highly Scalable. A single resolution will be applicable for everyone.

Less Scalable. Decision for each claim has to be individually assessed.

Prototype