Suppose you were going to send a large sum of money or a high value item to someone far away.  Now, suppose you have two options: you may send your money or thing insured, or forego the insurance and simply hope the send is successful for a slightly lower cost.  The vast majority of people in this hypothetical situation will opt for the insurance.  What about smart contracts?  I mean, yes, we can track the transaction, but if it should fail due to a hack, we are left to just eat that loss.  Well, we USED to be, anyway.

   Nexus Mutual aims to change the smart contract game.  Smart contract users can now purchase insurance for their smart contract transactions from Nexus Mutual, protecting ourselves against losses incurred in the event of transaction failure due to hacking.  According to the Smart Contract Cover Wording document provided by Nexus Mutual:

The Mutual may pay a claim under this Smart Contract Cover if:
• the designated smart contract address, or a directly related smart contract address in the case of a
smart contract system, suffers a hack during the cover period that is a direct result of its smart
contract code being used in an unintended way; and
• there is a material loss of funds from the smart contract, or smart contract system, due to the
hack, with funds either:
• moved to another address which the original owner or owners do not control; or
• made permanently irrecoverable;
and
• the Covered Member submits a claim during the cover period or within 35 days of the cover period
ending.

Exclusions
The Mutual does not provide Cover:
• for loss of funds due to phishing, private key security breaches, malware, exchange hacks or any
other activity where the covered smart contract continues to act as intended;
• any claims if the smart contract or smart contract system was deployed primarily for the purpose
of claiming on this Cover and not for real usage by customers;
• for any hacks occurring during the cover period if a hack occurred or a public bug disclosure was
made for the designated smart contract address, or a directly related smart contract address in the
case of a smart contract system, before the cover period began;
• for any events where inputs, that are external to the smart contract system, behave in an
unintended way and the smart contract system continues to operate as intended, where inputs
include but are not limited to; oracles, governance systems, incentive structures, miner behaviour
and network congestion.

   So, who decides whether a claim meets this criteria?  Nexus Mutual offers anyone willing to submit the necessary KYC criteria the opportunity to buy and sell its native NXM token using ETH.  NXM holders may stake tokens to become part of the Claims Assessment voting body.  So, in short, anyone who has validated membership with Nexus Mutual and has staked NXM tokens in Claims Assessment has a say in what claims are approved. 

   Holders may also stake NXM tokens with contracts they believe to be secure.  Whenever insurance is purchased through those contracts, rewards are distributed to those staked in it.  There is a measure of risk involved with this pooled contract staking, as staked tokens will be used to pay out validated claims made on these contracts, meaning your staked tokens could be spent to cover someone's insurance policy.  While it seems like this would incentivize Claims voters to deny every claim, doing so would destroy the credibility of Nexus Mutual and ruin any chance for the company to succeed.

   Lastly, who actually runs Nexus Mutual?  Governance of the Nexus Mutual dapp is handled, like Claims Assessment, by NXM token holders who vote on proposed changes and are paid for their efforts based on the result of the vote.  Unlike traditional companies, where an abnormally wealthy "board of directors" makes all corporate decisions with almost total autonomy, every NXM token holder has a say in the direction of Nexus Mutual.  Decentralized assets insured by a decentralized agency run by decentralized governance: as close to a perfect member co-op as any digital asset company has ever come, as far as I know.

   At the time of this article's posting, NXM tokens are valued at 0.1255 ETH, or ~$48.78USD.  I purchased 0.96 NXM less than a month ago and it was about $20USD cheaper at that time, so, as an investment, Nexus Mutual seems quite solid.  Like I said at the beginning of this article, most people will choose insured over uninsured transactions when given the choice, especially when those transactions are of high value and subject to targeted attempts of theft by hacking.

   In summary, Nexus Mutual offers hacking insurance on smart contracts and allows users who stake NXM tokens to handle literally every decision-making process in which the company is involved.  Power to the people, baby!