Introducing Opyn – A New Insurance Platform for DeFi Products
1/ We’re excited to announce at we’re stay on mainnet at https://t.co/ohSqfHGcnf! For the primary time you possibly can shield your @compoundfinance deposits towards each technical and monetary dangers at https://t.co/ohSqfHGcnf. https://t.co/6NPVOpryyl
— opyn (@opyn_) February 12, 2020
With Total Value Locked (TVL) not too long ago reaching $1B, insurance coverage is required greater than ever. The proliferation of DeFi has constructed new cash protocols offering a brand new paradigm for monetary merchandise. However, it’s changing into more and more clear that many of those platforms could current each recognized and unkown dangers to its customers.
As outlined in “The Inevitable DeFi Hack”, a DAO-like black swan occasion is essentially unavoidable. As DeFi protocols proceed to build up increasingly more worth is locked inside them – so does the inducement to steal it.
With that, Opyn is launching its new permissionless insurance coverage layer for DeFi – beginning with Compound – simply permitting customers to buy insurance coverage on their deposits.
The insurance coverage platform is constructed on a set of Ethereum sensible contracts related to Convexity Protocol – a generalized framework for fungible choices tokens. Unlike different outstanding insurance coverage platforms like Nexus Mutual which leverage a bonding curve, Opyn is a two-facet market leveraging Convexity’s oTokens.
This is an fascinating improvement as Opyn is likely one of the first insurance coverage platforms to supply safety over technical AND monetary dangers whereas Nexus Mutual largely covers solely technical dangers. Moreover, Opyn permits choices writers to earn important premiums by promoting insurance coverage covers on to customers – successfully permitting ETH holders to develop their ETH-based mostly holdings in a comparatively passive method.
Ultimately, it seems to be like Nexus Mutual has a brand new competitor within the realm of decentralized insurance coverage. Luckily, there’s loads of room for a number of effectively-design insurance coverage platforms since there’s no scarcity of worth locked as DeFi continues to develop at breakneck speeds.
Over the following few months, it will likely be fascinating to see how these platforms garner utilization from the broader DeFi group. While the insurance coverage house is in its nascency, there’s a rising demand for it. Nexus Mutual not too long ago surpassed $2M in whole lively covers as capability for the capital pool continues to extend.
Regardless, insurance coverage is a crucial piece to the broader success of DeFi. Protection and insurance coverage for customers will play an essential position in lengthy-time period sustainable development within the house. With a various vary of insurance coverage merchandise in the marketplace, the aftermath of a black swan occasion will be mitigated.
For anybody desirous about getting their Compound deposits insured by Opyn or incomes premiums through writing choices, be happy to go to their web site to get began. To become involved within the Opyn group, you possibly can be a part of their Discord right here.
Director at Fitzner Blockchain Consulting. Lucas additionally has expertise working with a number of blockchain-based mostly startups as head of group, blockchain strategist and undertaking supervisor the place he targeted on token economics, writing, and advertising and marketing.