Risk accessors providers deposit funds into Nexus Mutual and receive insurance premiums from policyholders (currently as token incentives).

Nexus Mutual is a non-custodial insurance protocol built on Ethereum. Nexus Mutual was founded by Hugh Karp and launched in 2017.

NXM tokenholders own and govern the protocol. They currently take all of the total insurance premiums paid by policyholders (revenue). Nexus Mutual's investors include KR1, Kenetic, Version One Ventures, etc.

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Nexus Mutual

# Nexus Mutual Average fees per user (AFPU) Methodology

## 1. Overview

Average fees per user (AFPU) measures the average amount of fees (insurance premiums) paid per daily active user on the Nexus Mutual insurance protocol. This metric is calculated by dividing total daily fees collected by the number of daily active users, providing insight into user monetization and fee generation efficiency. The calculation combines user activity tracking from insurance purchase events with premium payment data from both Nexus Mutual v1 and v2 contracts.

## 2. Data sources

The calculation uses several types of blockchain and external data:

- **Nexus Mutual user events**: Parsed Ethereum `CoverEdited` events from Nexus Mutual v1 contracts that identify insurance buyers
- **Premium payment events**: Parsed Ethereum `CoverDetailsEvent` events from Nexus Mutual v1 contracts containing premium payment details
- **Premium payment function calls**: Ethereum `buyCover` function calls from Nexus Mutual v2 contracts with premium payment parameters
- **Token metadata**: Predefined mappings of internal token IDs to Ethereum contract addresses for supported payment tokens
- **End-of-day price feeds**: Daily USD price data for token-to-USD conversion
- **CoinGecko daily market data**: Specialized daily price feeds for NXM token pricing

## 3. Step-by-step calculation

### Component A: User identification and counting

- **Purpose**: Identifies and counts daily active users who interact with Nexus Mutual insurance products
- **Logic**: Extracts insurance buyers from Ethereum `CoverEdited` events, which are emitted when insurance covers are purchased or modified. User addresses are identified from the `buyer` parameter in these events. The system truncates timestamps to day boundaries and counts distinct user addresses per day using HyperLogLog algorithms for scalable aggregation across multiple dimensions including project-level, chain-level, user-type, and product-level breakdowns
- **Key fields**: `block_timestamp` for timing, `buyer` address for user identification, `transaction_hash` for deduplication, `chain` for network identification

### Component B: Premium fee collection

- **Purpose**: Captures all premium payments made to Nexus Mutual for insurance coverage
- **Logic**: Collects premium payment data from two sources: Nexus Mutual v1 `CoverDetailsEvent` events containing `curr` (token ID) and `premium` (amount) fields, and Nexus Mutual v2 `buyCover` function calls containing `paymentAsset` (token ID) and `maxPremiumInAsset` (amount) parameters. Only successful transactions are included by filtering for non-removed events and successful function call status. Token IDs are mapped to actual contract addresses using predefined mappings for supported tokens including WETH, DAI, and NXM
- **Key fields**: `curr`/`paymentAsset` for token identification, `premium`/`maxPremiumInAsset` for payment amounts, `block_timestamp` for timing, `transaction_hash` for transaction linking

### Component C: Fee processing and USD conversion

- **Purpose**: Standardizes and converts premium payments to USD values for consistent calculation
- **Logic**: Applies decimal correction based on token standards to normalize amounts, then aggregates premiums by day and token address. USD conversion uses two approaches: standard end-of-day price feeds for most tokens, and specialized CoinGecko daily market data for NXM tokens due to limited availability in standard feeds. The system sums all converted premium amounts by day to get total daily fees in USD
- **Key fields**: `token_address` for price feed matching, `amount` for premium values, corrected `fees` after decimal adjustment, final `fees` in USD after conversion

### Final aggregation

- **Combining components**: Daily active user counts and daily fee totals are combined using the average revenue per user (ARPU) calculation methodology, where fees are divided by user counts for the same time period
- **Currency conversion**: All fees are converted to USD using end-of-day price feeds, with special handling for NXM tokens using CoinGecko data
- **Time aggregation**: Both user counts and fees are aggregated to daily boundaries using timestamp truncation to ensure matching time periods
- **Final calculation**: Average fees per user equals total daily fees in USD divided by daily active user count, with zero-filling applied for days with no activity to maintain complete time series data

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

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Average fees per user (AFPU)

Average fees per user (AFPU)

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