Today we are thrilled to announce the launch of a unique and revolutionary concept for DeFi: Steady State insurance protocol. Publicly launching its product concept today, Steady State is setting out to shape a safer, more secure ecosystem for decentralized finance by providing a comprehensive crypto insurance solution that can cover policyholders and protect users.
Currently under development, the Steady State protocol will pioneer a new standard of insurance in DeFi that will be led by deep, quantitative data analysis and complex risk modeling delivered through automated smart contracts underpinned by a governance DAO and a fully liquid secondary market.
Steady State aims to, for the first time, create a rich understanding of the risks faced by DeFi platforms and protocols that will allow it to fully price bespoke insurance coverage for providers — as is standard between insurers and providers in traditional finance. Deploying this solution through smart contracts will then remove bias, increase efficiency, and ensure immutable claims processing, all of which are lacking in the current DeFi insurance market.
DeFi has witnessed explosive growth over the past 18 months, with total value locked now standing at $110 billion from a little over $700 million in January 2020. With this explosive growth, however, has come increased risk, and many 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 and protocols, with most covering just a narrow range of smart-contract-based risk events and putting the burden of insurance on the individual user, rather than the provider.
Founder of Steady State, Jonathan Libby, 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”.
From its earliest beginnings, Steady State has been working closely with a fully operational wealth management platform in the DeFi space, YIELD App. Publicly launched in December 2020, YIELD App now supports more than 40,000 users that can deposit USDT, USDC and ETH on its platform for APY’s of up to 20%.
This market-leading proposition is backed by a team of highly experienced cryptocurrency, FinTech and capital market professionals that have been steering Steady State through its proposition development. This collaboration will work to ensure that Steady State is designing its product to meet the needs of DeFi platforms and protocols from the outset.
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.”
“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.”
In addition to comprehensive risk modeling, tailored insurance solutions and automation, Steady State aims to allow anyone to participate in its insurance ecosystem, with users of any sizeable to stake assets inside the coverage pools of individual protocols in return for a premium. While these assets are locked, users may 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, allowing for a comprehensive arbitration system able to assess and process a multitude of claims. Token holders will earn additional tokens through liquidity mining incentives and staking on the protocol once launched, and 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 can become stakeholders at any insured platform. Secondary trading opportunities will further strengthen the Steady State offering and help to support the entire ecosystem.
We believe Steady State will pave the way for a stronger, safer DeFi ecosystem that, through adequate and comprehensive user protection, will attract mainstream savers and investors currently hesitant to enter the market. This will allow DeFi, and cryptocurrency as a whole to reach its full, unbridled potential.
Steady State gives DeFi protocols and platforms a practical solution to safeguard their assets and users. Our platform aims to eliminate bottlenecks in DeFi insurance using automated processes, shared coverage policies, a cutting-edge risk analysis database, and Chaink Keeper technology. Steady State is creating a new paradigm for decentralized insurance by delivering DeFi’s most capital-efficient insurance platform for protocols. To learn more about Steady State and the impact of our pragmatic approach to Defi insurance, visit us at the links below: