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  "documentTitle": "Nexus Mutual Investment Memo August 2019",
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      "text": "1) Lack of full-time engineering team. Outsourcing engineering is not preferred, but it is palatable in this case given that the product is already live with significant traction and the Somish team is passionate about the project and plans to continue supporting it in various ways. The top priority post-fundraise is to hire an engineering lead based in London and Hugh will need to get better at attracting talent.",
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      "text": "2) Struggle growing the capital pool. If the capital pool just grows based on the smart contract cover fees accrued to it, the investment will have insurance-like returns rather than venture returns (see here). In order for this to have venture-like upside, the capital pool needs to grow significantly. The KYC aspect of the mutual could limit growth of contributions.",
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      "text": "We made two financial models for projecting NXM returns: one conservative model assuming the capital pool only grows from the premiums and one aggressive model assuming both the total addressable insurance market and market penetration of Nexus grow. Details of the financial models and their assumptions are here.",
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      "text": "The mutual launched with an initial allocation of 3M NXM tokens and since then 846k new NXM has been minted from the bonding curve. The current token distribution (before our investment) is 24.6% to the foundation, 21.9% to Hugh, 11.0% to the team, 25.8% to seed investors, and 16.6% to other members in the mutual.",
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      "text": "Based on the bonding curve formula, the price of NXM is directly correlated with the size of the capital pool, which is determined by more people contributing to the pool and new covers being taken out. The price of NXM is denominated in ETH, not USD.",
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      "text": "the bonding curve pushes the point upwards along the curve and makes the price higher for later buyers, and vice-versa is true for selling into the bonding curve.",
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