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Goldfinch V1 Documentation
Goldfinch V1 Documentation
  • Introduction
  • Goldfinch Overview
  • Protocol Mechanics
    • Glossary of key terms
    • Borrowers
    • Auditors
    • Backers
    • Liquidity Providers
    • Leverage Model
    • Membership
    • Investor Incentives
      • Backer Incentives
      • Senior Pool Liquidity Mining
    • Unique Entity Check
    • Discussion of Fraud Resistance
    • Staking
    • GFI Token
    • Liquidity & LP Withdrawals
    • Default Process
  • Governance
  • Tokenomics
    • Token Launch FAQ
  • Unique Identity (UID)
    • For Users
    • For Developers
    • Unique ID FAQ
  • Borrower Communication
  • Investor How-To
    • Getting Started on Goldfinch
    • Verifying Your Identity
    • Participating in Callable Deals
    • Participating in the Senior Pool
    • Participating in Borrower Pools
    • Participating in Liquidity Mining
    • Claiming GFI Distributions
    • Accessing Borrower Communication Channels
    • Purchasing coverage with Nexus Mutual
  • Borrower Mechanics
    • Raising Capital through Goldfinch
    • Goldfinch's Capital Providers
      • Sample Backer Economics
    • Goldfinch's Borrowers
      • Template Borrower Deal Structures
      • Borrower Case Study
    • Structure and Legal Considerations
      • Cash in and out of Goldfinch
        • Recommended Service Providers
      • Investor KYC / AML Requirements
      • Key Mechanics to Consider
        • Debt Facility Mechanics
        • Transaction Documentation
      • Borrower Senior Pool Participation
      • Backer Transferability
  • Borrower How-To
    • Launching a Borrower Pool on Goldfinch
      • Stage 0: Preliminary Actions and Decisions
      • Stage 1: Deal Structure and Timelines
      • Stage 2: Dataroom Preparation
      • Stage 3: Announcements and Tooling Set Up
      • Stage 4: Borrower Closing
  • General FAQ
  • 🔗Important links
    • Governance Portal
    • Developer Docs
    • Protocol Data Dashboard
    • Borrower Impact Data
    • November 2021 Audit
    • Immunefi Bug Bounty
    • Github
  • 🔗Connect
    • Discord
    • Twitter
    • Medium
    • Weekly Updates
    • Backer Launch Updates
    • Telegram
    • Youtube
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  • Overview
  • Factors to Consider when Buying Coverage
  • How to Buy Coverage

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  1. Investor How-To

Purchasing coverage with Nexus Mutual

PreviousAccessing Borrower Communication ChannelsNextBorrower Mechanics

Last updated 2 years ago

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Overview

Buying coverage for your productive assets is the best way to hedge against smart contract risk and protect your funds when you are participating in the Goldfinch Protocol.

Buying coverage for the Goldfinch protocol via industry-leading will provide insurance against your supply of USDC to the protocol's Senior Pool or Borrower Pools in the unlikely event of a smart contract bug resulting in lost funds.

It's worth noting that coverage only covers smart contract risk, and does not apply to the credit risk of Borrowers not paying back their loans.

If you need any support purchasing cover get in touch with the Nexus Mutual team via their their server, on or on .

Factors to Consider when Buying Coverage

Once you know what coverage product you want, you should consider the following factors:

  • How long do you need to be covered? The minimum duration of a cover policy is 30 days and the maximum duration is 365 days.

  • What payout denomination works best for you? When you buy your cover policy, you have to select the currency you want to receive a payout in should a loss event occur. You can select ETH or DAI. Most users select ETH as they payout denomination for more volatile assets and DAI as the payout denomination for more stable assets.

  • Which currency do you want to pay for your policy with? You can pay with ETH, DAI or NXM when you buy your cover policy. Consider which one you want to use for payment.

How to Buy Coverage

Now that you are ready to buy coverage, head to .

On the Home page, you will see the Welcome menu below, which displays your current holdings, covers, claims, and membership status.

From here, you will select the Buy Cover tab on the main menu. Once you have clicked on that tab, you will see the Buy Cover page, which is presented here:

On this page, you can see the different brief explanations of the mutual's cover products. Below these explanations are the various listed protocols, custodians, and yield token cover products.

You can filter by cover product: Yield Tokens, Protocols, and Custodians. You can also enter in the name of the platform or product you want to buy cover for.

In this tutorial, you will follow the process for buying cover by walking through a Protocol Cover policy purchase for Goldfinch Finance.

After you click Get Quote, you will see the Quote Details page which looks like the image pictured above

On the Quote Details screen, you will be presented with several fields, which are pictured in the image above and described below:

  1. Amount: This field is where you select your payout denomination (ETH or DAI) and the amount of capital that you want to cover. While payout denomination is only in ETH or DAI, you can cover any asset that is deposited within a listed protocol, custodian or yield token cover product.

  2. Period: This field is where you select the duration of your cover policy. The minimum duration is 30 days and the maximum duration is 365 days. Enter the number of days you want your cover policy to protect your assets for.

  3. "I have read and accept the terms and conditions" field: Before you can proceed with your cover purchase, you need to select this after you have read the Terms and Conditions.

  4. Grant TokenController Permission: If you look at the highlighted item under the Pay In field above, ****you will see the option to pay in either DAI or NXM. Here, you have selected NXM, so the protocol needs you to grant permission over your NXM to continue with payment. You can approve the NXM necessary for payment OR you can approve an unlimited amount of NXM for this and future payments.

  5. Buy Cover: After you have submitted the Grant TokenController Permission approval transaction, you will be able to purchase cover. When your approval transaction is complete, you will see this button appeal as bright green instead of the dull green pictured above.

To submit the transaction, select Confirm.

Once the transaction is approved, you will have successfully purchased a cover policy from Nexus Mutual! In this case, you purchased a Protocol Cover policy for Goldfinch Finance.

You can confirm a cover purchase has been successful by checking the My Covers section on this page. Here, you will see a full list of your current cover policies along with the Cover ID, Project Name, Cover Amount, Premium Paid, and the ability to file a Claim.

Now you are ready to buy your own cover policy for the Goldfinch protocol!

To find the Goldfinch Finance listing, you can enter the name of the protocol in the Search bar.

After searching for "Goldfinch Finance," we can see the Protocol Cover listing for Goldfinch Finance. Because you are protecting a deposit in Goldfinch Finance, you will select Get Quote for that listing.

Terms and Conditions: This is a brief review of the terms for Protocol Cover, the support chains for the selected protocol, and the conditions for submitting a claim in the event of a loss of funds. Be sure to read this before proceeding to item #4. The link included at the bottom of the Terms and Conditions is the link to the .

Since you have read through the Terms and Conditions, clicked that you have read and agreed to the terms, and have chosen to approve 0.13 NXM to pay for the cover policy, you will be prompted to approve the transaction through your wallet provider. In this case, you are using MetaMask and you see the following:

After you have submitted the approval transaction, you can see the pending transaction in the menu on the top bar of the application:

Once the approval transaction is complete, you will be able to click Buy Cover and move through the prompt for the second transaction, which will execute the purchase of your cover policy. To buy your cover, you must see the following fields pictured here: .

After clicking Buy Cover, you will be asked to approve a transaction. After you submit the transaction, you can see your pending transaction in the drop down menu on the top bar of the application:

To review your newly purchased cover policy, you can go back to the Home tab where you started and look at the Welcome menu under My Covers. Click here for a .

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The view on the Nexus Mutual Home page.
The view on the Buy Cover page of the Nexus Mutual application.
Click here to see a screenshot.
Click here to see a screenshot.
Protocol Cover wording
The approval transaction prompt to grant the TokenController contract permission to spend 0.13 NXM.
Set allowance for TokenController transaction is shown as pending in this drop down menu.
Agreed to terms and conditions; granted TokenController permission to spend NXM; ready to buy cover
Buy Cover transaction is shown as pending in this drop down menu.
screenshot