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How Steady State Will Revolutionize Insurance for the DeFi Industry

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investors looking for safe haven bitcoin

Risks such as flash loan exploits, hacks, and stablecoin de-pegging are a serious deterrent for DeFi adoption. Now Steady State is seeking to push DeFi out of the “fear zone” by insuring funds held on decentralized protocols.

Insurance for DeFi

Steady State is launching a comprehensive insurance solution for decentralized finance (DeFi). The project shifts responsibility from individual users, and the protocol holding the underlying assets, and transfers that responsibility to Steady State insurance. Theoretically, this should allow all parties to sleep more soundly at night.

Decentralized finance in its current form can never fully realize its potential: the risks from flash loan exploits, hacks, and stablecoin de-pegging mean that a large swathe of potential investors will simply never venture into the market. Any cursory examination of the sector makes it easy to understand why that is.

A single flash loan attack in February of this year drained $37 million from C.R.E.A.M. protocol tanking the price of its native token by 30% in half an hour. In May, flash loan exploits on a single chain, Binance Smart Chain, totalled $167 million. These sorts of reports effectively place a handbrake on the market, slowing its growth and making bigger investors and institutions turn away.

Without the additional safety that an insurance solution such as Steady State can provide, the growth of the sector will always remain underwhelming.

Steady On

Steady State posits that insurance issued through smart contracts can help to create a more efficient and better solution for decentralized finance. Parts of the insurance process which are currently carried out by humans (with all their inherent biases) can instead be carried out logically with code.

Users can interact with the platform by first staking their assets as collateral, with Steady State using the capital to underwrite DeFi protocols. Users are rewarded for staking while simultaneously safeguarding funds.

The project operates on what is called a direct-to-protocol basis. According to Steady State, the use of their insurance coverage and index pools optimizes capital efficiency. Steady State sources liquidity in a novel way which they say cannot be accomplished with user-centric models.

All of this takes place in a community-centric environment, creating insurance policies that go beyond individual cover and instead cover multiple risk vectors for entire communities. Steady State has tagged this model “DeFi insurance 2.0”.

Building the Market

Steady State hopes that their approach to DeFi insurance will allow for the growth of a true risk market, inviting users to buy and sell collateral on a liquid secondary market. This will allow users to sell funds that may otherwise be locked up in insurance smart contracts. Over time it is expected that this form of collateral trading will help to further spread risk and make the ecosystem more robust.

This will, in turn, help to build the credibility of the DeFi market, inviting large investors and institutions to participate in a number of ways. Insurance could even be a strong primary driver of adoption, as an area in which institutions can see a path towards direct participation in the market.

If Steady State can create a solution which onboards existing DeFi users and attracts a fresh influx of capital from institutions and whales, the company could indeed be set to revolutionize the insurance industry.

 

 

 

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ETH has Shot up 1777%, Clocking $4.34B From Q4 2020 to Q4 2021

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Ethereum Killers Have Helped the Ecosystem Prosper! Find out how!
  • Bankless puts out a report on ETH surges from Q4 2020 to Q4 2021.
  • ETH has shot up 1777% from Q4 2020 to Q4 2021.
  • DeFi has exploded to about 770% up from Q4 2020 to Q4 2021.

The second largest crypto in the world, in terms of market cap, the Ethereum (ETH) is obviously one of the most anticipated. Indeed it has come up a long way still maintaining its supremacy over the altcoin industry. In spite of this, one of the most profuse online crypto analysis platforms and investment advisory, the Bankless posts a tweet, regarding it’s report on ETH. 

Upon the tweet Bankless terms, that as protocols unusually don’t put up their yearly statistics, they have completely published the report on ETH from Q4 2020 to Q4 2021. 

ETH Surge Between Q4 2020 to Q4 2021

Though be something of the past, the past records are obviously vital in the crypto industry, solely on the basis of market analysis. According to the Ethereum report by Bankless, a complete project like Ethereum has surpassed effortlessly in almost all it’s attributes together for the year 2021.

Regardless, it was in the Q4 of 2021 that ETH even hit it’s still current ATH of $4,860. In addition, on comparing the Q4 of 2020 with Q4 of 2021, ETH has massively exploded in all terms. Also, the complete revenue shot up from $231.4 million to a whopping $4.34 billion for the overall ETH platform. This accounts to a massive surge of 1,777% rise in it’s revenue on comparing Q4 of 2020 to Q4 of 2021. One of the major reasons for this surge on ETH also accounts to the platform’s increase in active users during Q4 of 2021. The active users rose upto 34% on Q4 of 2021 alone. 

DeFi’s Boost for ETH

Apart from the other attributes based upon the ETH blockchain, the Decentralized Finance (DeFi) obviously plays a major role for ETH such surges in between the period of Q4 of 2020 to Q4 of 2021. 

Similarly, taking into account the DeFi surges between Q4 of 2020 to Q4 of 2021, the sector has witnessed a striking surge of overall about 770%. In addition, the overall Total Value Locked (TVL) has surged up from $17.73 billion to $154.2 billion astonishingly. Amongst this, the Curve plays the major role as it alone holds about $20 billion TVL.  

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Justin Sun Embraces His New Role as Grenada’s Brand Ambassador to WTO

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Tron Founder Justin Sun Appointed as Grenada's WTO Ambassador