The developers of the decentralized insurance project Tidal Finance have launched a main network and a token reward system for members contributing capital to reserve pools.
According to the developers of the project, Tidal Finance was launched on the second level network of the Ethereum Polygon. Clients of the subscription-based insurance app include StaFi, Xend Finance, Marlin, EasyFi and bZx.
Faced with a shortage of insurance options, cryptocurrency companies, especially DeFi projects, have begun rolling out alternative solutions. Decentralized insurance involves the use of reserve pools to cover losses. Such pools have an incentive system that allows individual investors who supply assets to the pool to receive a return on investment.
“At launch, Tidal is going to contribute $ 200,000 to the contingency fund. Judging by our competitors, we are confident that we will easily start with $ 5 million and even go up to $ 10 million in pools, ”said Chad Liu, CEO of Tidal Finance.
Tidal uses the term “mining” to describe the distribution of its own token to members who choose to pool USDC to support one or more protocols that offer insurance coverage.
“According to our estimates, if they support one protocol, they will be able to get about 15% per annum. If they support, say, seven protocols in the initial launch pool, their profits could rise to about 100% per annum, ”Liu said.
He noted that Tidal takes a direct approach to claims settlement, relying on a combination of in-house security experts and a partnership with Halborn, a security and audit firm in the blockchain and smart contracts industry.
“The final decision on the claims rests with the Risk Assessment Committee,” Liu said. “In my opinion, it is better to have an assessment of a separate party that has no interest in the loss of capital when a claim arises.”
Late last year, Tidal Finance became a founding member of the alliance to develop the DeFi industry.
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