–News Direct–
When the algorithmic stablecoin Terra $UST was fixed
asset
Not thanks to this catastrophic collapse of the Terra ecosystem, thousands of investors scattered all over the world lost
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
“The main reason our response was effective was because of how timely and efficient it was,” Thomson said.
“In
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.
Summary:
Total Covers Sold: 234
Total coverage amount:
Total requests: 173
Total claim amount (USD):
Total number of rejected requests: 18
Total value deducted from
Total claim amount after deductions (USD):
InsurAce — $UST Baptism Payment Summary
More importantly, an in-depth look at the chain’s claims data showed that InsurAce took a significant hit in the process. According to an updated report published by the protocol
When asked about the payment decision-making process, Thomson explained that InsurAce implemented a community-driven approach, with its independent local government retainers ($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
InsurAce.io 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 InsurAce.io, users can rely on:
Since his debut in
InsurAce is run by the founders
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InsurAce.io 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
InsurAce.io
[email protected]
Company website
https://www.insurace.io/
See source version at newsdirect.com: https://newsdirect.com/news/insurace-announces-12-million-insurance-payouts-to-155-victims-of-terra-ust-crash-836556523