Rei Melbardis leads research and development at Nexus Mutual, a crypto native insurance alternative that has built itself around an older idea: insurance as a mutual, owned by the members who share the risk, rather than an extractive model that sits apart from customers.
Melbardis is from Latvia and has lived in the UK for half his life. He moved for university, studied at Warwick, and began his career in corporate insurance, starting at Munich Re. “My first job was in financial reporting,” he says. “That was an annual calculation of the value of the company’s insurance business as a whole, projected into the future.”
He then moved into structured reinsurance, the part of the market that helps insurers manage capital and balance sheets, and which tends to shape outcomes long before any customer sees a policy document. By 2017, though, he was questioning whether the corporate track was still where he wanted to be. He took a break and left the office behind. “I was a snowboard instructor for a winter,” he says. “I trained as an instructor in Austria, worked in a ski school for about a month and a half, and then I took a brief trip to Asia.”
When he returned, the work waiting for him did not help. “I was a bit bored and disenfranchised with the corporate world,” he says. “My big project at the time was setting the company up for Brexit. It was frustrating work, because no one really wanted to allocate resources to it on top of their day jobs. It was a lot of politicking and not much doing.”
At the same time, he had started experimenting with crypto through 2017. Nexus Mutual came onto his radar through a direct connection – his department head. When Melbardis asked if help was needed, the answer was immediate. “I left my corporate role to join Nexus at the seed stage,” he says.
From parametric cover to smart contracts
Nexus Mutual did not begin with its flagship Smart Contract Cover. The initial concept was parametric coverage, where a payout is triggered by a measurable external event. “In the original version, it was supposed to be parametric earthquake cover,” Melbardis says. “If there is an earthquake within x meters of your house, then there would be an automatic payout.”
The pivot came because of the nascent risks that were already visible in decentralised finance. “We soon realized that the industry needed protection for its own unique risks,” he says. “So we launched with Smart Contract Cover as the first product.”
How the cover works in plain terms
Smart Contract Cover is designed to protect users against losses from exploits in specific pieces of code. Melbardis describes it through a simple example. “Let’s say I’m a DeFi user,” he says. “I put $500k in Aave, and I’m worried about the risks of that protocol. So I would buy some Smart Contract Cover to protect me in case something were to happen to Aave as a whole.”
The underwriting work looks familiar to anyone who has worked in traditional insurance, even if the subject matter is new. “Our product and risk team will look at the individual protocols,” he says. “They look at the underlying security, assess the teams, any code audits that they’ve had, any issues that were found, the responses to those issues. Then we can put forward a price.”
Capacity is created through member participation. Nexus Mutual uses its own token, NXM, which represents membership interest and is used for staking and governance. “It’s a representation of members’ interests in the mutual,” he says. “Its utility is members’ ability to signal through staking which risks are good ones for the Mutual to take on.”
Members can stake NXM against specific products. In practice, that staking is what opens the ability for others to buy cover. “It’s probably its main use, to stake against the individual products,” he says. “That’s how you would open up capacity.”
The incentives are clear. “If the cover is then bought, new NXM rewards are minted to the people who stake against those products,” he says. “But also, if there is a claim then those tokens get burned.”
Who buys cover now
The buyer base has shifted over time. “It’s changed over the years,” Melbardis says. “Now it tends to be institutional entities. Hedge funds are our main customers at the moment.”
For larger buyers, this can look like portfolio level risk management rather than retail style cover on a single protocol. “We can tailor coverage to the specific DeFi portfolios of institutional buyers, and give them the flexibility to move in and out of positions while maintaining protection against the risks that concern them,” he says.
Recreating insurance as a mutual
Melbardis is direct about the philosophical intent. “Absolutely,” he says. “We’re not inventing anything new here. We’re just using the technology to resurrect the mutual model.”
For him, the mutual point is structural. “The core of the mutual model remains that it should be owned by the people who also protect themselves against those risks,” he says. “It means you can participate both on the supply side and the buy side.”
He also argues that operating onchain reduces friction and increases transparency. “It’s so much easier when everything is onchain,” he says. “You can report in real time, just press a refresh button on Dune, and everything updates.”
The organisation has stayed lean. “We have 16 people currently between the mutual and the DAO that we consider as the core team,” he says.
On performance, he points to recent premium volume and claims. “In 2025 we’ve sold $5.7 million in premiums,” he says, and paid out “$350k in claims.” Over the life of the mutual, he says it has paid out about $19 million.
What the team is building next
The current build agenda is about increasing capacity and expanding the product set without losing underwriting discipline.
One strand is partnering with firms that can take reinsurance style exposure, allowing Nexus Mutual to write larger limits without relying only on its own capital pool. “We’re partnering with Ethereum restaking protocols where stakers will trust our underwriting and take capacity,” he says.
Another is a structure aimed at real world insurance returns through an on chain vault model. “You deposit USDC into a vault,” he says, “and then it gets invested into real world insurance companies, with returns coming back to depositors.”
A third track is exploring regulated pools to offer regulated insurance products, including areas where crypto firms and holders face straightforward commercial risks, and where the team believes it can price and structure policies competitively.
Alongside those initiatives, Nexus Mutual has also introduced a product that reflects a more personal set of risks emerging around crypto wealth. “One of the recent products that we’ve announced was kidnapping & ransom coverage,” Melbardis says. “You get access to a SWAT-like team, so you or a loved one can call a professional to take over the whole rescue process in case the unthinkable happens.” He adds that it can also cover a ransom payment if one is needed.
Decentralised finance is no longer separate
Melbardis closes with a view that crypto has to become infrastructure, not a parallel industry. “It can’t really survive anymore on just being crypto and being this separate thing,” he says.
He points to the everyday usability gap, including privacy. “If I send someone USDC as payment, they can see my wallet and all of my transactions,” he says, describing why a broader audience is unlikely to accept the current industry default.
His underlying argument is practical: if finance on public blockchains is going to matter, it needs to behave like an improvement on existing systems, with complexity kept away from the end user, and with risk management and recovery that feels and really is more robust than the traditional financial world it is now converging with.
