Insurance Services for rETH Users: Tidal Insurance Finding a New Ground on the StaFi App

The StaFi Protocol’s enterprising factor is to unlock liquidity to secure user-staked assets and the minting of rTokens. An initiative that has led to a flexible staking process, generating equivalent rTokens to trade while earning incentives for supporting the network. The security of users’ assets is Stafi’s top priority.

Building on that standard, while the StaFi team has made great strides with their products, the security procedures in place to secure users’ funds are never disregarded. As a result, StaFi is currently working with Tidal Finance, a leading insurance platform to secure a specific TVL (Total Value Locked) on their platform in the event of a smart contract attack. This is possible by buying assets under coverage on the Tidal platform to secure assets. According to StaFi’s team, they have purchased a two million dollar asset under coverage.

Tidal also acknowledges that they have launched an insurance pool for StaFi’s rETH App and rBridges contracts.

As questions continue to rise within the community about how to protect users’ assets with greater coverage, although the two million dollar coverage may not be enough to cover users’ losses completely, the project team is certain that getting a very high TVL would add to StaFi treasury’s load.

Hence, Tidal is offering StaFi Protocol community the new “individual coverage service” which will also enable those who wish to add an extra layer of security to their assets the opportunity to do so at a minimal fee. And as the insurance pool is now open, anyone can contribute USDC to cover StaFi.

StaFi Protocol

StaFi is the first DeFi system to allow staked assets to be liquidated. StaFi allows users to stake PoS tokens and obtain rTokens in exchange, which may be traded while still receiving staking rewards. When users stake PoS tokens through the StaFi rToken App, they receive rToken, a synthetic staking derivative produced by StaFi. Users’ staked PoS tokens and the related staking incentives are used to anchor rTokens. At any time, rTokens can be transferred and traded.

Tidal Insurance Finance

TIDAL is a decentralized discretionary mutual cover system that allows the DeFi community to protect themselves against any DeFi protocol or asset failure. The increased capital efficiency attracts reserve suppliers, while a competitive insurance price attracts buyers by directly leveraging up the reserve to cover several protocols at the same time

The majority of Tidal’s members are covered (insurance) purchasers and reserve providers. Tidal pools cash from reserve suppliers to offer covers to purchasers, as pure peer-to-peer matching platforms on an individual basis have failed to acquire traction in areas relating to both lending and insurance. This increases capital efficiency because the same reserve can back more covers than can be paid out individually, and it also prevents a peer matching process caused by two people wanting the same thing at the same time.

StaFi-Tidal collaboration

By collaborating closely with Tidal, StaFi provides users with a “self-purchase option” for individuals who want to improve the security of their funds. Users can stake the stable coin (USDC) on the Tidal platform and supply reserve for StaFi if they’re looking for high yield products with low default (hack) risk for StaFi’s rETH App and rBridges contracts.

This ensures coverage for all StaFi’s smart contract vulnerabilities that are deployed on the Ethereum network, — rETH App and Bridges. As a result, any user asset forfeited to malicious assaults and economic exploits would be eligible for a legal claim. Any appropriate payout amount will be paid directly to the StaFi team to recoup the losses of StaFi subscribers. The tokens available to users to buy coverage include FIS tokens and USDC, both on the Polygon chain.

The coverage plan is automatically extended every week, so there’s no need to pay everything upfront. Thus, a user’s asset is insured as long as the payment account balance used is sufficient.

The coverage plan is so flexible that users can always change the amount of coverage at any moment in their account if they are not sure of the amount of coverage they require. Also, according to StaFi, the total insurance cap for rETH users will be 1 million USDC for the time being.

Members who are worried about how to keep up with the claim if there’s a hack wouldn’t need to bother as collaborating with the Tidal team has already handled that part. Users do not need to register a claim; damage can be assessed using your purchase wallet, and reimbursement will be given based on your purchase history.

What users stand to gain

Aside from the fact that StaFi is now paying for protocol-level coverage from their treasury, users stand to enjoy the following benefits:

• The protocol level coverage is also designed to be utilized for asset recovery, for instance, track hackers, reimburse hackers in the event of a smart contract attack since the return might be considerably bigger for consumers. The money that is not used will be used to refund users.
• Also, users who bought coverage would be paid out in full for the amount insured, to minimize the risk of partial coverage that protocol-level coverage would provide.

Conclusion

StaFi protocol is doing everything to protect users and ensure the security of assets is their top priority. This fact informed their decision to collaborate with Tidal on the solution. Also, to encourage rETH holders to obtain rETH insurance, the team foundation will reimburse 75% of the total insurance fees, implying that the rETH insurance price will be only 1% for rETH users, rather than the actual rate of 4% on the Tidal platform.

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