On 8 August 2022, the Hodlnaut team announced that they were halting all withdrawals, token swaps and deposits effective immediately. People who held money in Hodlnaut custodial accounts could no longer access their funds. At this time, withdrawals are still halted on Hodlnaut.
Nexus Mutual members who purchased Hodlnaut Custody Cover were protected against withdrawals being halted for more than 90 days. On 7 November 2022, Hodlnaut Custody Cover holders began filing claims and members began assessing those claims.
To date, members have approved 18 claims and paid out 221 ETH + 764,008 DAI — more than $1.04m — to people affected by halted withdrawals on Hodlnaut.
The first claims were filed on 7 November 2022. In total, 21 claims have been filed to date. When submitting Custody Cover claims, members have to provide off-chain proof of loss, which includes screenshots of their balance and balance statements, as well as other supporting evidence and documents.
Members who participated in the Claims Assessment process staked their NXM and participated in claims discussions and claims voting. Claims Assessors are rewarded with NXM if they vote honestly and with the majority. There are economic incentives to reward honest, truthful contributions.
Claims Assessors who try to deny a legitimate claim can be penalized by having their NXM burned by the Advisory Board. In this way, the Claims Assessment process is designed like an optimistic oracle, where it’s more costly to attack the process than any value that could be gained.
To learn more, read the Claims Assessment section in the Nexus Mutual documentation.
Members with Hodlnaut cover that have not yet filed a claim can still do so. See the How Hodlnaut Custody Cover holders can prepare for claims filing guide for more information.
Of the 21 claims filed, 18 claims were approved and paid out. A total of 221 ETH and 764,008 DAI was paid out for claims 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 140, 141, 143, 144, 145, and 147.
All of the above claims were submitted with supporting off-chain proof of loss. Claims Assessors used this evidence to verify the loss amount and determine the validity of the claims. You can review the Hodlnaut Claims Tracker for more detail.
Claims Assessors reviewed and denied Claims 126, 139, and 142.
Claims 126, 127, and 128 were all filed together by one member. When the 90-day period ended, the actual loss was ~47 ETH. Claims Assessors discussed the claims in the Nexus Mutual Discord and decided that approving Claim 127 and 128 would reimburse the member for their actual loss without paying more than the actual loss since the technical requirement for partial claims is not available in the Nexus Mutual V1 protocol.
Claims 129 and 139 were both filed by one member. When the 90-day period ended, the actual loss was ~20 ETH. Claims Assessors discussed the claims in the Nexus Mutual Discord and decided that approving Claim 129 and denying Claim 139 would reimburse the member for their actual loss without paying more than the actual loss since the technical requirement for partial claims is not available in the Nexus Mutual V1 protocol.
Claim 142 was filed with no supporting proof of loss. Claims Assessors attempted to contact this member in the Nexus Mutual Discord and via Blockscan Chat, but no supporting proof of loss was submitted. Because Claims Assessors could not verify the loss, this claim was denied.
Members buy cover to protect themselves against unforeseen loss events. With these claim payouts, members have once again protected people who purchased cover against a loss of funds.
The Hodlnaut claim event highlights the importance of transparency within the blockchain space and what can happen without transparent reporting. Anyone can review Nexus Mutual’s claim history or the mutual’s key metrics and analytics. Everything is fully auditable and available on chain.
You can read an in-depth review of the Hodlnaut Halted Withdrawals claim event in the Nexus Mutual documentation.