[Company Watch] Defi Insurance Platform Unslashed Finance (New Defi Series 4/5)
We have earlier analyzed an innovative insurance provider on the chain — Cover Protocol, which used a bi-token model to provide peer-to-peer insurance to users. There are a number of other peer-to-peer defi insurance companies have since launched, e.g. INSUR, Opium Finance, Bridge Mutual, etc. And also the first platform Nexus Mutual. This article introduces one with ongoing incentives, Unslashed Finance, and its mining program.
Unslashed Finance is a platform that insures users for various cryptocurrency risks, ranging from protocol risks, to USDT unpegging risks. For instance, if you are concerned about USDT dropping drastically below $1, you can purchase a cover against this risk, for a small rate of 1.02% per annum. Unslashed Finance is able to provide coverage up to 17,126 ETH, or equivalent of more than $40m.
How Unslashed Finance works is essentially peer-to-peer insurance, whereby some users pool ETH together to underwrite a particular type of risk. As of now, there are 25 pools in Unslashed Finance. Other than USDT unpegging risks, there are also pools for platform default, ledger hardware dysfunc, coinbase custodian failure, exchange funds missing, etc.
Users who intend to underwrite can put funds into particular pools to provide coverage for any risks. In addition to this, Unslashed Finance has launched a general pool, named the Spartan Bucket, which covers all pools. Users providing coverage by depositing into Spartan Bucket will be entitled to insurance premiums paid into all the 25 pools.
Risk exposure is limited to 5% per pool, i.e. Any claim event of one particular risk can remove a maximum of 5% of the total ETH deposited in the Spartan Bucket. There are a total of 46,925 ETH in the Bucket now.
As a new platform, Unslashed Finance offers attractive incentives for investors. As the Bucket is denominated in ETH, the current yield of 20%~30% (depending on the price of USF, the platform token) is attractive to ETH holders.
To invest into the Spartan Bucket and get the rewards, one simply need to Supply Capital, accumulate the rewards token and withdraw. There are a few things to note:
- USF rewards are distributed in epochs of 15 days each. One has to deposit and hold till the end of the epoch to be entitled to the rewards
- Each epoch rewards has a vesting time of 15 days
- Withdrawal of ETH deposited has two steps: make a withdraw request and come back again 48 hours later to withdraw the ETH. This is to ensure that there’s no claim made during that period.
Unslashed Finance is a new but elegant design of on-chain insurance. We look forward to seeing this platform grow and offering more values and features to investors.
(Serenity Team, 16 April 2021, Twitter: https://twitter.com/SerenityFund)