Nexus Expects Loss on Maple Credit Pool Invest as FTX Contagion Spreads

Nexus Announces to Remove Funds

According to a warning from Nexus, the recent default of Orthogonal Trading might result in a loss of 2,461 ether (ETH), or $3 million. The alternative insurance provider also announced that it has begun to remove all monies from the impacted wrapped ether credit pool. According to the statement, this accounts for 1.6% of Nexus's assets.

Following a public vote, Nexus placed 15,463 ETH, or approximately $19.3 million at the current market prices, into a wrapped ether credit pool on Maple Finance in August. A peer-to-peer risk-sharing system called Nexus provides a substitute for insurance against risks in decentralized finance (DeFi), such as DAO attacks and smart contract issues. A group of NXM token owners runs it.

Data From Auros and Maple’s Credit Dashboard

However, it appears that additional Nexus money is in jeopardy. Around $5 million worth of Orthogonal Trading's defaulted debt on Maple's wrapped ether credit pool (3,900 wETH). Auros Global, a troubled market maker, also owes the same pool of lenders an additional $7.5 million (6,000 wETH) in active loans after defaulting on a $3.1 million (2,400 wETH) loan.

According to Maple's credit dashboard, the problematic debt accounts for 56% of the $27.8 million total outstanding debt in the wETH credit pool. The alternative insurance provider can only withdraw $3.1 million in cash deposits that are not constantly bound up in loans. Prior to capital withdrawals, Maple requires a 10-day holding period for deposits.