In a move that could point towards greater decentralization and wider access, the Nexus Mutual community is currently considering a proposal to sunset the coverage protocol’s legal entity and lift Know Your Customer (KYC) burdens currently necessary to interact with the platform.
The proposal was announced yesterday in a Tweet by investment fund 1kx co-founder Christopher Heymann. In it, Heymann notes that Nexus originally launched with a “a UK-based limited company” in order to protect the team from legal liabilities and tax-related issues.
1/ Attention Nexus Mutants: Nexus Mutual is evolving.
We are launching Operation Wartortle with the goal of sunsetting the legal entity behind Nexus Mutual, which would remove the requirement to KYC for NXM token holders. https://t.co/BKg6Jdkips
— Christopher Heymann (@HeyoChristopher) April 22, 2021
However, Heymann argues that the DAO, with over 3,500 global members, is now sufficiently decentralized and no longer needs a “legal wrapper” in the form of a limited company.
In addition to shedding a superfluous legal entity, the proposal also argues that the requirements under the entity to KYC users have grown onerous and are limiting Nexus’ growth:
“While these efforts protected Nexus Mutual during the early days of inceptions, these limitations also imposed barriers to global permissionless participation and ownership of Nexus Mutual. It complicated the user journey of acquiring smart contract coverage, prevented individuals from certain countries from participating in Nexus Mutual, and represented a challenge in properly distributing the $NXM token to the DeFi ecosystem.”
As a result, in the proposal 1kx requests up to $50,000 to perform “legal due diligence” on sunsetting the legal entity with the help of law firm Norton Rose Fulbright. This would result in a legal memo outlining a strategy to wind down the entity, which would then be voted on by the DAO as well.
In a statement to Cointelegraph,…