How did a crypto insurer come to the rescue when UST depegged?
Crypto Insurer
Modified Date:- Published Date:-Categories: Cryptocurrency
How did a crypto insurer come to the rescue when UST depegged?
In fact, 155 investors managed to avoid a complete collapse after foresight to take out an insurance policy that protected them. InsureS offered a policy that would reimburse crypto enthusiasts if UST, an algorithmic stablecoin, lost its peg to the US dollar. It ended up doing so in spectacular fashion—the first fell to mere cents days after being divorced meaningfully from $1.
Overall, the crypto insurance protocol said it ended up paying $12 million to clients, and 98% of claims were approved. By contrast, InsurAce claims some of its rivals have claimed to honor payouts — or failed to offer policies that would protect investors against a depeg in the first place. InsurAce says it has been able to win the confidence of crypto investors by having clear policies in place, and acting quickly in response to market movements.
Barely 48 hours after the UST dip, the insurance protocol set the process for claims in motion – and explained cover was officially triggered as UST fell below $0.88.
The payment was finalized after just one month. Chief Marketing Officer Dan Thomson said at the time that incidents like these were a driving force in the founding of InsureS, which has an ambition to ensure crypto is safe for all.
The protocol also has a decentralized feel, in which claims are voted on by a community of claim evaluators who hold and wager INSUR tokens. Fresh from stepping up to the plate after the Terra debacle, InsureS says it has covered $340 million worth of assets -- 140 protocols listed on its app.
In addition, 20 public chains are now covered – and its mainnet is now deployed in Ethereum, Binance Smart Chain, Avalanche and Polygon. In today's economy everything from cell phones to your home is insured, and it only makes sense that crypto investing would follow. But what really matters is making sure policies are effective and proactive – paying off fast to protect investors when things go wrong.
The crypto insurer had just purchased an Bitcoin insurance contract written on smart contracts that would let users store USDT in order to pay a higher premium than they were paying at the time of the depeg.