How to Manage StaFi’s Insurance Pool on Tidal
StaFi continues to impress and gain the trust of her community by constantly dishing out interesting updates. There is barely a dull moment with these guys and in this article; we will be discussing their partnership with Tidal.
Staking Finance (StaFi)
StaFi is a decentralized finance (DeFi) protocol that aims to unlock the liquidity of staked assets. StaFi achieves this goal by issuing alternative tokens, mainly known as rTokens on a 1:1 basis of the tokens staked on the original chain in order to hedge against market volatility. These alternative tokens can come in the form of rXTZ for staked Tezoz tokens and they can also be traded. With this, StaFi solves the long troubling issue between Mainnet security and token liquidity.
Recently, StaFi announced that they have opened an insurance pool for their rETH App and rBridges contracts on Tidal Finance.
Tidal Finance
Tidal is a decentralized discretionary mutual cover protocol that enables the DeFi community to protect itself should any DeFi protocol or asset fail.
It is an insurance DeFi protocol designed to keep track of all of the space’s growth and development.
There is no doubt that huge amounts of money are poured into various DeFi protocol initiatives in the hopes of reaping significant rewards. Over $87 Billion was reported to be locked in the space earlier this year but just a minor percentage of this fund is insured. Amidst the allure of profit associated with the DeFi space, there are still major concerns about how secure these profitable protocols are. We’ve seen cases where a DeFi protocol loses millions of dollars due to a security breach or incompetence from developers, and this has imposed fear in the hearts of users/investors which has led to a notable fall in the Total Value Locked since its inception. However, these risks prompted new innovations such as decentralized insurance.
Tidal Finance is one of those remarkable innovations that seek to improve everything related to DeFi insurance. It is designed in such a way that its users contribute funds to insure Decentralized applications in the DeFi space against every insecurity or smart contract failure.
Tidal Finance’s insurance products will go a long way in restoring lost trust and increase participation once again in the space.
Tidal’s core features and functionalities include the ability to build a custom insurance pool for one or more assets from multiple chains. The Tidal insurance pool and the Reserve Smart Contract are the core functionalities of the protocol. Each of these insurance pools will be created to provide insurance for a single or combination of crypto assets or contracts.
Each of the insurance pools is governed by a Reserve Smart Contract, in which LPs provide reserve funds and the equivalent insurance token issued, which offers insurance for the selected DeFi protocol and tokens for a particular period of time.
Insurance pools can be created in Tidal by selecting one or more contracts to cover. Users have the advantage of being able to choose from a variety of coins across multiple platforms. This means that a user could select Uniswap as a platform and then ETH as a coin.
As a result, the pool’s creator gains the advantage of being able to select assets from various platforms available on the market. Also, that user determines the duration of coverage, leverage ratio, and many other factors.
Following the creation of a pool, a vetting process is carried out immediately to ascertain the level of insolvency appended to it. Once the level of insolvency is ascertained, and the risks involved are measured and acknowledged, the product becomes available for public use.
How to Manage StaFi’s Insurance Pool on Tidal
StaFi’s partnership with Tidal ensures that users can now stake and earn magnificently without having to carry their hearts in their mouths for the fear of the platform getting exploited and funds lost. StaFi’s rETH App and rBridges contracts on the Tidal platform have a low hack risk possibility; one can stake the stable coin (USDC) on the platform and provide a reserve for StaFi.
The current Tidal coverage plan covers StaFi’s smart contract vulnerabilities on the Ethereum network, such as rETH App and rBridges. Users are eligible to reclaim funds in the case of malicious attacks and economic exploits that result in asset loss for StaFi users. Any valid payout amount will be paid directly to the StaFi team in order to recover StaFi users’ losses.
Benefits of Providing Reserve for StaFi
Anyone who provides the reserve for the StaFi protocol on Tidal’s platform will earn a 10%-20% APR with the following two rewards:
1.) Earning cover premiums directly from StaFi’s coverage plan
The reserve provider will receive 90% of the premium fee paid by StaFi protocol, the insurance buyer.
2.) TIDAL token rewards through the Cover Mining Program
According to the previously published cover mining article by Tidal, reserve providers will be rewarded with up to $2885 worth of TIDAL (445904 TIDAL tokens at a price of 0.006) each week.
Check out this link for more information: https://docs.tidal.finance/getting-started/network-roles/reserve-provider
Conclusion
One of the most lovable and interesting things about crypto is that there is always someone looking to close the gaps and cover the potholes troubling the ecosystem.
The reports of malicious attacks and exploits rocking the amazing DeFi initiative have sprung fear into the hearts of willing investors, which has led to many preferring to brace their funds to their chests than risk it for an insecure highly rewarding scheme.
Although Tidal Finance is not the first to look into insuring user’s funds, they are taking the insurance protocol up a notch by catering to the capital-intensive nature of the space with their pool creation feature, which is something other protocols with similar initiatives lack.
Stay connected with the StaFi project using the Links below:
Official Website |*| Telegram || Medium |*| Twitter
