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NXM Staker User Flow

Overview​

Staking in NXM Staking Pools allows you to earn rewards by locking up NXM tokens to help underwrite insurance covers. However, staking also carries risks, including NXM burns in the case of a claim payout.

What You Need to Know Before Staking​

  • ✅ You earn rewards over time based on how long your NXM is staked.
  • ⚠️ Your NXM may be burned if a claim is approved and your pool is liable for part of the payout.
  • ✅ Your stake is locked within a tranche, but if you deposit mid-tranche, your lock-up time may be shorter.
  • ⚠️ Managers control voting power over your staked NXM, which can delay withdrawals.
  • ✅ You can extend your stake to keep earning rewards after your tranche expires.

Choosing a Staking Pool​

Before staking, always check the pool's conditions:

1. Manager Fees​

  • Managers can change the fee at any time (up to the max fee set at pool creation).

  • Check the current and max fee before depositing:

    uint currentFee = stakingPool.getPoolFee();
    uint maxFee = stakingPool.getMaxPoolFee();

2. Products Covered by the Pool​

  • Ensure the pool supports products you are comfortable underwriting.

  • Check listed products:

    StakingProducts.getPoolProducts(poolId);

3. Pool Utilization & Risk Exposure​

  • Higher utilization may mean more rewards but also higher burn risk, depending on the risk profile of the products listed.

  • Check pool utilization using the capacity pools API:

    GET https://api.nexusmutual.io/v2/capacity/pools/{poolId}

    {
      "poolId": 22,
      "utilizationRate": 4926,  // 49.26% utilization
      ...
    }

Key Concepts​

How Staking, Underwriting & Rewards Work​

When you stake in a pool:

  1. Your NXM provides underwriting capacity → The pool can now sell insurance cover.
  2. Cover premiums are collected → The pool earns fees from cover sales.
  3. Stakers earn rewards over time → Rewards are distributed proportionally to staking duration & share supply.
    • Premiums flow into the Capital Pool when a cover is purchased.
    • 50% of the cover premium is minted as NXM and allocated as rewards to the staking pools.
    • The manager's fee is deducted from these pool rewards before distribution.
    • The remaining staking pool rewards are streamed over the cover's lifetime.
    • Stakers earn a share of these streaming rewards proportionally to their share of the pool based on their staking duration & share supply.
  4. If a claim is approved, staked NXM may be burned → The pool's allocated capacity determines the burn amount.

Tranches & What Happens When They Expire​

  • Staking happens in fixed 91-day tranches.
  • Before expiration: Your stake is actively used for underwriting.
  • After expiration:
    • ✅ You stop underwriting, and your stake is eligible for withdrawal.
    • ✅ You can extend your deposit to keep earning.
    • ⚠️ Rewards do not continue indefinitely after expiration.
      • If your staked NXM is no longer underwriting active cover, it will not earn additional rewards.
      • Risk of NXM burns only applies while your NXM is still backing active cover.
      • If all covers your stake was allocated to have expired, your risk is reduced, but so are rewards.
      • To continue earning, you must either extend your stake or actively participate in underwriting.
    • ⚠️ You can only withdraw if the tranche has expired. However, even if the tranche expires, if your staked NXM is being used by the manager for voting, you must wait until the voting concludes to withdraw.

Depositing Mid-Tranche & Withdrawal Timing​

  • If you deposit mid-tranche, you are locked for the remainder of that tranche.
  • Example:
    • You stake 50 days into a 91-day tranche.
    • Your stake will unlock on Day 91.
    • Since you entered on Day 50, you can withdraw after 42 more days (on Day 92).

Checking When a Tranche Will Expire​

You can check when the tranche will expire using:

uint TRANCHE_DURATION = 91 days;
uint trancheExpirationTime = (trancheId + 1) * TRANCHE_DURATION;

To get the first active tranche ID (earliest tranche still providing capacity):

uint firstActiveTrancheId = StakingPool.getFirstActiveTrancheId();

How Earnings Flow in a Staking Pool​

  • Premiums flow into the Capital Pool when a cover is purchased.
  • 50% of the cover premium is minted as NXM and allocated as rewards to the staking pools.
  • The manager's fee is deducted from these pool rewards before distribution.
  • The remaining staking pool rewards are streamed over the cover's lifetime.
  • Stakers earn a share of these streaming rewards proportionally to their share of the pool based on their staking duration & share supply.

How to Check Withdrawal Eligibility​

Your staked NXM can be locked for two reasons:

  1. The tranche is not expired yet.

    • Use this function to check when the tranche expires:

      uint TRANCHE_DURATION = 91 days;
      uint trancheExpirationTime = (trancheId + 1) * TRANCHE_DURATION;

  2. Your NXM is locked due to voting.

    • If your manager voted, your withdrawal is delayed until the vote concludes.

    • Use this function to check if your stake is locked due to voting:

      address manager = StakingPool.manager();
      uint managerLockedInGovernanceUntil = nxm.isLockedForMV(manager);

How NXM Burns Are Calculated​

When a valid claim is approved, a portion of the staked NXM in the pool is burned to cover the payout.

How the Burn Amount is Calculated​

NXM burns are proportional to the pool's share of total risk exposure:

Pool Burned NXM=Pool’s Allocated Capacity for the CoverTotal Allocated Capacity Across All Pools×Cover Payout\text{Pool Burned NXM} = \frac{\text{Pool's Allocated Capacity for the Cover}}{\text{Total Allocated Capacity Across All Pools}} \times \text{Cover Payout}

However, this only determines the total burned amount for the pool. The actual amount burned for each individual staker depends on their share of the pool's total stake.

How Much NXM Will Be Burned Per Staker?​

Each staker's NXM burn is proportional to their share of the total pool stake.

Staker Burned NXM=Staker’s Share of Pool StakeTotal Staked in Pool×Pool Burned NXM\text{Staker Burned NXM} = \frac{\text{Staker's Share of Pool Stake}}{\text{Total Staked in Pool}} \times \text{Pool Burned NXM}

Example Scenario:​

  • A 100,000 NXM cover payout is approved.
  • There are three pools backing the cover, with the following allocations:
PoolAllocated CapacityPercentage of Total CapacityPool Burned NXM
Pool A200,000 NXM40%40,000 NXM
Pool B150,000 NXM30%30,000 NXM
Pool C150,000 NXM30%30,000 NXM
Total500,000 NXM100%100,000 NXM

Individual Staker Burn Calculation:​

If you have 20,000 NXM staked in Pool A, and Pool A burns 40,000 NXM, your burn amount is:

20,000200,000×40,000=4,000 NXM burned\frac{20,000}{200,000} \times 40,000 = 4,000 \text{ NXM burned}
How to Check Your Staking Share:​

To check your total staked amount ofin the pool:

uint stakedAmount = StakingPool.getStakeInfo(tokenId);

To check total stake in the pool:

uint totalPoolStake = StakingPool.getPoolStake(poolId);

Step-by-Step Process​

Pre-Staking Checklist​

Verify the Pool's Fee Structure​

  • Check the current pool fee and maximum fee limit.
  • StakingPool.getPoolFee();
    StakingPool.getMaxPoolFee();

Review the Products the Pool Underwrites​

  • Ensure you're comfortable with the risk level of the products covered.
  • StakingViewer.getPoolProducts(poolId);

Check Pool Utilization & Burn Risk​

  • High utilization means higher risk of NXM burns.

  • Check pool utilization using the capacity pools API:

    GET https://api.nexusmutual.io/v2/capacity/pools/{poolId}

    {
      "poolId": 22,
      "utilizationRate": 4926,  // 49.26% utilization
      ...
    }

Understand Withdrawal Rules​

  • Your stake may be locked for voting.
  • If you stake mid-tranche, your lock-up period may be shorter. 
    // Tranche Expiration
     uint trancheExpirationTime = (trancheId + 1) * TRANCHE_DURATION;
     // NXM token locked for voting
     address manager = StakingPool.manager();
     uint managerLockedInGovernanceUntil = nxm.isLockedForMV(manager);

How to Deposit​

Depositing NXM into a staking pool allows you to earn rewards while underwriting risk. Before depositing, consider:

  • Manager Fee: Verify the percentage taken from rewards.
  • Risk Exposure: Ensure the pool supports products you're comfortable underwriting.
  • Staking Period: Longer staking periods lock funds for longer but yield proportional rewards.
StakingPool.depositTo(uint amount, uint trancheId, uint requestTokenId, address destination)
ParameterDescription
amountAmount of NXM to stake
trancheIdID of the tranche to stake in
requestTokenIdID of the request token (0 if not using a request token)
destinationAddress that will receive the staking position NFT

Returns: uint tokenId - The ID of the newly minted staking position NFT

How to Extend a Stake​

To keep your stake active beyond its initial duration and continue earning rewards, you must extend it before expiration.

StakingPool.extendDeposit(uint tokenId, uint newDuration);
ParameterDescription
tokenIdID of the staking position (NFT) to extend.
newDurationAdditional duration for staking.

How to Withdraw Stake / Rewards​

Once the staking period has ended, you can withdraw your stake. Be aware that if the manager recently voted, there might be a delay.

Rewards can be withdrawn anytime.

function withdraw(uint tokenId, bool withdrawStake, bool withdrawRewards, uint[] memory trancheIds) external;
ParameterDescription
tokenIdThe ID of the staking NFT token.
withdrawStakeWhether to withdraw the stake.
withdrawRewardsWhether to withdraw the rewards.
trancheIdsThe IDs of the tranches to withdraw from.

How to Check Withdrawal Eligibility​

Your staked NXM can be locked for two reasons:

  1. The tranche is not expired yet.

    • To find when a trancheId will expire:

      uint TRANCHE_DURATION = 91 days;
      uint trancheExpirationTime = (trancheId + 1) * TRANCHE_DURATION;

  2. Your NXM is locked due to voting.

    • If your manager voted, your withdrawal is delayed until the vote concludes.

    • Use this function to check if your stake is locked due to voting:

      address manager = StakingPool.manager();
      uint managerLockedInGovernanceUntil = nxm.isLockedForMV(manager);

Frequently Asked Questions (FAQ)​

What happens if a manager votes near the end of a tranche?​

  • Your stake remains locked for voting even if the tranche expires.
  • Example:
    • Manager votes on Day 88 of a 91-day tranche.
    • Tranche expires on Day 91, but your NXM remains locked.
    • If voting ends on Day 96, you must wait until then to withdraw.

Can I prevent my NXM from being used in governance?​

  • ❌ No, when you stake, you delegate governance rights to the pool manager.

How do I know if my stake is at risk of being burned?​

  • The risk depends on:

    • Utilization of the pool (how much NXM is backing active cover).
    • Risk level of the listed products (higher risk = higher chance of claims).

  • Check pool utilization using the capacity pools API:

    GET https://api.nexusmutual.io/v2/capacity/pools/{poolId}

    {
      "poolId": 22,
      "utilizationRate": 4926,  // 49.26% utilization
      ...
    }

What happens if a manager votes near the end of a tranche?​

  • Your stake remains locked for voting even if the tranche expires.
  • Example:
    • Manager votes on Day 88 of a 91-day tranche.
    • Tranche expires on Day 91, but your NXM remains locked.
    • If voting ends on Day 96, you must wait until then to withdraw.

Can I prevent my NXM from being used in governance?​

  • ❌ No, when you stake, you delegate governance rights to the pool manager.

How do I know if my stake is at risk of being burned?​

  • The risk depends on:

    • Utilization of the pool (how much NXM is backing active cover).
    • Risk level of the listed products (higher risk = higher chance of claims).

  • Check pool utilization using the capacity pools API:

    GET https://api.nexusmutual.io/v2/capacity/pools/{poolId}

    {
      "poolId": 22,
      "utilizationRate": 4926,  // 49.26% utilization
      ...
    }

How can I track when my stake will be unlocked?​

To check when your stake will be unlocked:

// Get full token info including all deposits and their tranche IDs
Token token = StakingViewer.getToken(tokenId);

// For each deposit, calculate when its tranche expires
uint TRANCHE_DURATION = 91 days;
uint trancheExpirationTime = (trancheId + 1) * TRANCHE_DURATION;

// Check if withdrawals are blocked by governance voting
address manager = StakingPool.manager();
uint managerLockedInGovernanceUntil = nxm.isLockedForMV(manager);

Note: Even after a tranche expires, withdrawals may be blocked if the pool manager is participating in governance voting. The Token struct returned by getToken() includes:

  • deposits: Array of all deposits for this token, each containing its trancheId
  • activeStake: Currently active stake amount
  • expiredStake: Amount of stake in expired tranches
  • rewards: Total rewards earned

Best Practices​

✅ Monitor Staking Periods: Extend deposits if you want to continue earning.
⚠️ Be Aware of Voting Locks: Your stake may be locked if the manager votes.
✅ Check Manager Fees Regularly: Managers can change fees at any time.