InsurAce Announces $12 Million Insurance Settlement for 155 Terra UST Crash Victims – InsuranceNewsNet

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When the algorithmic stablecoin Terra $UST was fixed May 2022many feared that the crash would lead to a systemic crash of the entire cryptocurrency industry. And ThomsonThe Chief Marketing Officer of the leading DeFi platform — InsurAce, recounts how their immediate insurance payouts to over 155 victims who lost funds in the accident helped maintain investor confidence in DeFi at such a critical time.

asset May 6, 2022, news broke on major crypto channels that the algorithmic stablecoin Terra-$UST had lost its connection, leading to widespread investor panic. And within an eventful 48 hours between May 12 to May 13, 2022the price then 18 billion dollars Algorithmic Stablecoin MarketCap Terra USD ($UST), which was supposed to hold a $1 pin, fell down 35 cents IN May 9. Its sister token, $LUNA, which was meant to stabilize the price of $UST, fell from 80 dollars close to zero.

Not thanks to this catastrophic collapse of the Terra ecosystem, thousands of investors scattered all over the world lost 40 billion dollars – consequently, the world of DeFi threatened to fall apart, until Stablecoin De-Cover with pin came to the rescue.

What is it Stablecoin security?

Stablecoins are special digital assets that play the traditional role of money in the blockchain world. They are cryptocurrencies that have their value tied to a specific fiat currency or in some cases, a basket of currencies.

When designing stablecoins, issuers must navigate the trilemma of decentralization, security, and stability to find the optimal reserve mechanism to support their tokens. Asset-backed stablecoins are more stable, they are often largely centralized. And that means users can be exposed to vulnerabilities from a single point of failure, as well as censorship and restrictions from regulators.

And while algorithmic and crypto-backed stablecoins are more secure and decentralized, even when they are overcollateralized, they present a high risk of de-linking during adverse market conditions.

To mitigate these risks, DeFi protocols have created Stablecoin De-peg Covers to protect stablecoin users and investors from certain de-pegging events.

InsurAce was one of the DeFi protocols that made the most impactful responses to the recent high-profile stablecoin de-peg that occurred in the Terra ecosystem.

During a recent interview, InsurAce’s CMO And Thomson revealed how the timely intervention of the DeFi protocol helped to save the situation.

“The main reason our response was effective was because of how timely and efficient it was,” Thomson said.

“In May 13, barely 48 hours after the $UST de-peg event, we issued a press release to set in motion the loss claim process for $UST investors. We published a user guide that provided clarity on coverage specifications and claim eligibility. With a 7-day claims window, we set a goal to provide immediate support to victims and send a reassuring statement to the rest of the DeFi world. he added.

How InsurAce reacted to the $UST crash

With a streamlined claims process, InsurAce drew praise globally for providing timely intervention to $UST investors who had hedged their $UST stablecoins with InsurAce. The quick response from InsurAce helped restore investor confidence in DeFi as users quickly replenished amid a horrific market-wide downturn.


Total Covers Sold: 234

Total coverage amount: $22,158820

Total requests: 173

Total claim amount (USD): $12,474,477.84

Total number of rejected requests: 18

Total value deducted from Luna Drop (USD): $177,692

Total claim amount after deductions (USD): $11,730,758.24

InsurAce — $UST Baptism Payment Summary

More importantly, an in-depth look at the chain’s claims data showed that InsurAce took a significant hit in the process. According to an updated report published by the protocol Advisory Boardhas evaluated the protocol ~$11.7 million in $UST unfreezing claims. Collecting alone $94,000 in premium payments, such a high rate of successful claims payments indicated that the platform had put in place outstanding risk management strategies prior to the crystallization of De-peg risk.

When asked about the payment decision-making process, Thomson explained that InsurAce implemented a community-driven approach, with its independent local government retainers ($INSUR.) executing the claims assessment process.

“Decentralized voting was conducted by the community of InsurAce Claim Assessors who hold and stake $INSUR Tokens. And at the end of the Voting process, they approved a total of 155$UST de-peg Cover claims and rejected 18 as ineligible in accordance with the Stablecoin de-peg Cover terms and conditions. Thomson continued.

Compensation for Ecosystem Investors and Stakers

When asked how InsurAce plans to compensate its underwriters for their role in the $UST De peg event, Thompson responded by saying that InsurAce has since unveiled a Stakers Compensation Plan to help reduce losses for its underwriters. protocol that have used their assets as part of the UST $ payments.

“In addition to improving our risk management strategies, we have put several plans in place to mitigate losses caused by actors. Over the next 12 months, a fixed amount will be paid to a pool on the chain from which participants can withdraw their compensation. The scalable approach will help us ensure that we can help players recover some of their losses, while maintaining healthy liquidity in the InsurAce protocol.” Thomson concluded.

The crash of $UST remains one of the biggest tests for DeFi as a whole, mitigated in part by the safety nets from protocols and signatories working hard to protect the space. With the presence and continued efforts of protocols like InsurAce to protect users in the space, DeFi is rapidly evolving into an increasingly safe, sound and sustainable global alternative to traditional finance, one where individuals have more control and autonomy. big on their finances.

About InsurAce is a leading decentralized multi-chain protocol that provides reliable, robust and secure risk protection services to DeFi users, allowing them to protect their investment funds against various risks.

With, users can rely on:

Since his debut in April 2021, has built a full spectrum integrated product line covering 140+ protocols, 3 CEX and 1 IDO platform running on Ethereum, as well as Solana, BNB Smart Chain, Polygon, Fantom, Gnosis, Arbitrum, Avalanche, Harmony, Celo, Cronos, Boba, ICON, Ontology, Moonriver, Moon Beam, Bifrost, Aurora and Optimism. currently has a live product deployed on Ethereum, BNB Smart Chain (BSC), Polygon and Avalanche.

InsurAce is run by the founders Oliver XieSuma Wu and And Thomson (@vagrantcrypto) with a globally distributed team of security and web3 experts.

Relationships: is a leading decentralized multi-chain protocol that provides reliable, robust and secure risk protection services to DeFi users, allowing them to protect their investment funds against various risks.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.

Contact details

And ThomsonCMO

[email protected]

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