In our latest alliance with a true innovator of decentralized finance (DeFi), YIELD App is thrilled to announce a partnership with Steady State — a cutting-edge insurance protocol that is set to transform the DeFi and cryptocurrency protection landscape.
Currently in its first stages of development, Steady State is pioneering a revolutionary new model in DeFi insurance that will insure platforms and protocols against a comprehensive range of risks — a first in the industry. Steady State will do this using data-driven risk-modeling governed and deployed through smart contracts, finally meeting DeFi with an insurance solution as innovative as the platforms and protocols it seeks to protect.
DeFi has witnessed explosive growth over the past 18 months, with total value locked now standing at $60 billion from a little over $700 million in January 2020. With this explosive growth, however, has come increased risk, and a number of platforms and protocols have been subject to hacks and exploits that have cost their users millions.
In response to this, a select few protocols have emerged that offer varying levels of insurance to DeFi users. None, however, are yet able to meet the unique needs of DeFi platforms, with most covering a narrow range of smart-contract-based risk events and putting the burden of insurance on the user, rather than the provider.
Insurance that meets DeFi’s needs
Steady State aims to solve this by developing a unique, quantitative insurance model that is capable of collecting and analyzing a vast set of data on hacks and exploits to develop complex risk models that will allow for accurate, customized pricing of insurance at a platform level.
In addition, this ecosystem will run on and be governed by smart contracts — allowing DeFi insurance to meet the same level of trustless and efficient automation that has been the driving force behind the providers it seeks to insure.
This data-driven, automated system will not only allow for insurance coverage at a DeFi provider level, but will also remove the inherent conflicts of interest and biases that are an inevitable result of the current DeFi insurance landscape.
YIELD App, which to date supports more than 40,000 users globally to invest their USDT, USDC and ETH for an APY of up to 20%, is supporting Steady State with the view to becoming one of its first customers.
Commenting on the development of Steady State, Tim Frost, CEO of YIELD App, says: “We have long been of the view that the DeFi insurance market is lacking. Our search for an adequate protocol for our own platform led us to take an interest in Steady State, which we believe has the potential to transform the cryptocurrency protection landscape.
“As we have commented before, the one major factor holding back mainstream adoption of cryptocurrency is its risk profile. While no investment is risk-free (even, or especially cash in some regions) a high number of hacks and exploits has been discouraging for new users that might be convinced to enter the market if their assets were adequately insured.”
A multi-layered insurance ecosystem
Steady State will allow anyone to participate in its insurance ecosystem, with users of any size able to stake assets inside the coverage pools of individual protocols in return for a premium. While these assets are locked, users will be able to trade their stakes on a secondary market, facilitating a fully liquid environment that can support and strengthen the entire protocol.
Holders of Steady State’s native token will also be able to participate in governance of the protocol, allowing for a comprehensive arbitration system able to assess and process a multitude of claims. Token holders will be able to earn additional tokens through liquidity mining incentives and by staking on the protocol once launched, and also earn rewards based on a percentage of fees earned by the entire protocol.
Steady State’s risk-based approach mirrors methods found in traditional insurance markets, where a full and complex understanding of risk allows institutions to provide adequate cover for providers and their customers.
Utilizing the tools of DeFi, however, Steady State will create a rewarding, 360-degree ecosystem in which users are able to become stakeholders at any insured platform. Secondary trading opportunities will further strengthen the Steady State offering and help to support the entire ecosystem.
Jonathan Libby, CEO and founder of Steady State, comments: “Steady State is what every member of the DeFi community has been waiting for: an insurance product that understands and can accurately price the risks faced by platforms and their users. It shouldn’t be down to individuals to cover their assets in arbitrary pools — we need a system that looks a lot more like traditional finance to help reach everyone that stands to benefit from the new economy emerging on the blockchain.
“We have been working closely with YIELD App from our earliest stages and will continue to do so over the coming weeks and months to develop and deliver a product we believe will break new ground in DeFi and cryptocurrency more widely.”
More on Steady State
Steady State aims to pioneer more robust insurance for decentralized finance (DeFi) through rigorous data analysis and risk modeling deployed through immutable smart contracts. Its model takes the guesswork out of DeFi insurance claims to provide customized, comprehensive, and reliable cover for cryptocurrency platforms and protocols that can mitigate the impact of human error and bias. Steady State wants to remove the burden of responsibility of insurance from the DeFi user and place it where it belongs — with the provider — while allowing users to participate in a rewarding ecosystem that includes premium payout opportunities. For more information, visit https://www.steadystate.finance/