TLDR;
- Enzyme + Unslashed are teaming up to build superior insurance infrastructure.
- Enzyme will provide the asset management infrastructure enabling Unslashed to leverage the security, maintenance and development work around the Enzyme ecosystem.
- Unslashed will be able to focus on creating diversified Buckets of insurance with different risk profiles as a product which is totally un-correlated to anything else in DeFi.
- Providing capital on Unslashed now opens you up to 3 sources of Yield; USF Capital Mining program, DeFi returns via Enzyme plug-in AND insurance premiums. This is a unique and unbeatable proposition today that will boost the APY of Capital Suppliers on Unslashed.
- This will bring lower insurance premiums and enable higher security guarantees to purchasers of insurance policies on Unslashed.
Intro
Today we’re proud to announce an exciting partnership with Unslashed to build out the world’s first capital efficient DeFi insurance protocol — allowing deposited collateral to earn DeFi yield on top of your standard premiums and $USF mining. What could be better than that?
As far as asset management protocols go today, Enzyme (v2) offers everything you would need to run a secure and capital efficient strategy. Aside from supporting a huge range of assets today, Enzyme plugs into all of DeFi making it possible to spin up a strategy and earn yield on it efficiently.
As the de facto insurance protocol in DeFi, Unslashed has got to more than $100m in TVL during a private (guarded) launch. Those who know Unslashed will know that this is the smartest designed insurance infrastructure available in DeFi today. The capital efficiency baked into its design serves as a win-all for underwriters, insurance buyers and the stakeholders of both protocols. Below, we’ll tell you why.
The Unslashed Approach to Insurance
Unslashed focuses on building a protocol that enables the creation of structured insurance products called “Buckets”, a Bucket is a diverse collection of insurance policies that are carefully designed, assessed, priced and put together for Capital Suppliers to underwrite. Each Bucket has a different risk profile, contains different policies and generates a different yield. In traditional finance, similar products are called ILSs. They offer a yield that is uncorrelated to the market whilst creating a necessary bridge between finance and insurance.
Unslashed provides insurance policies on everything; smart contract risk, validator slashing (PoS networks), exchange hacks and stable coin pegs — you name it. This is combined with a qualitative + quantitative approach covering multidimensional blockchain risks to ensure policy buyers are always protected.
Policy protection is only as good as the claims process underpinning it. The claims process with Unslashed is unbiased and relies on independent assessors and arbitrators. This guarantees that claims are treated fairly and in a non-discretionary manner.
The last component of a successful insurance marketplace is capital efficiency. Insurers sit on huge amounts of capital from underwriters. Allowing that capital to sit and gather dust is just not efficient. This is where Enzyme comes in.
Enzyme as a natural infrastructure choice
Enzyme offers superior functionality and support then any other asset management infrastructure in DeFi today. It supports 200+ assets and is connected with all types of DeFi protocols today. Enzyme Vaults can handle lending, AMM pools (eg. Uniswap and Curve pools), staking (eg. Curve LP tokens or just plain ETH), semi-automated farming strategies, leverage and more. The modular and extensible design empowers teams like Unslashed to build alongside and extend the protocol to a new use-case enabling them to go-to-market much faster and at a fraction of the cost.
Perhaps more importantly though is that by leveraging Enzyme as infrastructure — the Unslashed team can essentially lean on Enzyme’s network of developers and highly recognised security experts (Enzyme Council, Chain Security, PWC and Open Zeppelin), outsource the maintenance burden and free themselves up to focus on building the best insurance protocol in the market.
Why Supply Capital (underwrite) on Unslashed today?
Supplying Capital to underwrite Buckets on Unslashed offers a never before seen set of advantages as far as DeFi insurance goes;
1.The Buckets diversify risk
Insurance in crypto needs underwriters and nobody wants to put all their eggs in one basket — especially given the technical barriers to understanding how crypto systems work. If we can’t attract underwriters, then we can’t bring credible guarantees against risks in crypto full stop. Diversifying risk is a beautiful solution which spreads risk and makes it much more comfortable to underwrite through Buckets.
2.Partnership with Enzyme helps grow the Bucket’s Capital with simple farming strategies which are compounded
Allocating the Capital within the Buckets via Enzyme allows it to earn a yield. Simple farming strategies which compound returns can generate as much as 20% yield on ETH which already creates an additional buffer of safety if Claims are triggered but also means that the Bucket can remain profitable even if multiple claims are made!
3.Earn premiums from Cover buyers!
Premiums paid by cover buyers are also added to the Bucket adding another revenue stream to Capital Suppliers.
4.Profit from a generous Capital Mining program taking place for up to 10 years — earn $USF while you can!
Unslashed has launched a generous Capital Mining Program which is taking place over up to 10 yrs. Information on the next capital mining epoch is published periodically on their medium/twitter and the last one can be found here.
Advantages of Buying Cover on Unslashed
Hopefully, by now the advantages of buying Cover on the Unslashed + Enzyme combined system are becoming obvious!
1. Cheaper premiums
With capital efficiency that we get from plugging into Enzyme, some premiums could now afford to come down.
2. Transparency over Capitalisation and Risk Management
You can see at any point how capitalised the system is. The pooled approach helps diversify risk and increase the underwriting capital. The Enzyme system gives full transparency into how the capital is being deployed and users can compare this against how much cover has been purchased.
In plain english — the Unslashed model gives you access to low insurance premiums and stronger security guarantees. Until now, you could only get one or the other in DeFi. The Unslashed + Enzyme partnership means you no longer have to choose between the two!
Mutual beneficial Ecosystem Growth ($MLN + $USF)
We’ve talked about the benefits to insurance protocol users. But what about the benefits to the Unslashed and Enzyme communities.
Here’s our take:
Benefits to the Unslashed Community:
- Empowers Unslashed by enabling them to Go-to-market with a secure and sophisticated product in a fraction of the time
- Offer higher yields to Capital Suppliers, in ETH, on top of the Capital Mining rewards and the premiums earned in ETH. This could allow to almost double the total yield in a sustainable fashion
- Enables them to focus on Product (different insurance products) and getting the various risk assessments right
- Allows them to focus on growth and market share without the burden of maintaining the asset management protocol and security considerations
- Faster growth = better for $USF token
Benefits to the Enzyme Community:
- Bringing a new use-case to Enzyme which helps grow Assets Under Management
- Working with experts in the insurance field instead of trying to build out this use-case ourselves from scratch
- Direct benefits to the $MLN token (upon implementation of MIP7).
Next Steps
Unslashed will run this through their governance process after which the Capital Deployment will happen in 3 phases. The bridge between the two protocols has already been built and fully audited by Chain Security.
Summary;
Diversification in Buckets = De-risking insurance underwriting
Asset Management + Yield Strategies = Stronger Capital Pool
Stronger Capital Pool = Stronger Security Guarantees
Stronger Security Guarantees = More happy insurance Buyers
More happy insurance buyers = Stronger Capital Pool… and the cycle continues!
Learn About Enzyme
Visit website and go to app here
Get started with User Docs
Read about our current roadmap; Sulu release
Latest release info on v2
Enzyme medium page
Contact Us
