Everstake is proud to announce a strategic partnership with Nexus Mutual, a peer-to-peer discretionary mutual on the Ethereum blockchain offering on-chain coverage against ETH staking risks, such as penalties, slashing events, and missed rewards. The new partnership will help Everstake users benefit from Nexus Mutual’s ETH Staking Coverage, which is designed to protect stakers if Everstake validators experience infrastructure or setup failure that result in slashing or downtime.
One of the biggest draws of DeFi is the yields users can earn on farming and staking protocols. However, staking is subject to unique and more damaging risks: slashing and penalties.
PoS protocols have a mechanism where a portion of a validator’s stake is taken away if they behave dishonestly or go offline. For example, a validator can be penalized for failing to use their validator key, which can be caused by anything from system failure, downtime, or human error. Such punishment will result in that validator losing a percentage of their staked currency.
Slashing is an even bigger risk since it can result in users losing a significant amount of their stake or being ejected from the network. Slashing is a way to incentivize proper consensus and deter bad actors from participating in a blockchain. If a validator shows harmful behavior, some of their staked tokens will get slashed or lost. However, slashing can happen due to being on downtime or causing transactions to be double-signed.
- Downtime happens when a validator is offline for any reason. If this happens consistently, validators can be penalized by forfeiting a small amount of their staked tokens.
- Double-signing occurs when a validating entity submits two signed messages for the same block. This is a much greater offense than downtime, making double-signing penalties much larger.
The Benefits of ETH Staking Coverage
It can be tricky to avoid slashing; however, validators can protect staked assets from associated risks. Therefore, Everstake is working with Nexus Mutual to offer ETH Staking Coverage, which protects users against penalties, slashing events, and missed rewards.
Here’s how it works: When a validator experiences a loss due to downtime or slashing, a user can file a claim, and Everstake will work with Nexus Mutual to determine the cause and amount of the loss. From there, Everstake will process the claim and reimburse the user for any funds lost.
Protecting users from the risks associated with ETH staking is our number one priority, and this new ETH Staking Coverage helps create a 360-degree secure staking environment.
About Nexus Mutual
Nexus Mutual is a decentralized insurance alternative and the leading provider of crypto-native coverage. The mutual was created to give people a way to hedge against the unique risks in on-chain markets. Nexus Mutual members protect more than $158.7m in productive assets and have paid out $8.45m in claims to date. Learn more about Nexus Mutual by visiting nexusmutual.io.
About Everstake
Everstake is a trusted decentralized staking provider catering to over 70 blockchains, including Solana, Cosmos, and NEAR, ETH 2.0, Polygon, Tezos. We run highly secure and reliable nodes for PoS protocols using enterprise-level hardware to ensure maximum efficiency and security. This coverage protects our validators and further underlines our dedication to delivering a high-quality, reliable, and secure staking service to 625,000+ users spread across the globe.
To learn more, visit our staking page to select available PoS coins to delegate with Everstake and start getting passive income today.
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