Enzyme, a blockchain asset management platform, has announced a new partnership with Unslashed, a protocol that enables the creation of structured insurance products, to build a new capital-efficient DeFi insurance protocol – enabling deposited collateral to generate a DeFi return earn on top of standard premiums and USF mining.
Enzyme recently unveiled version 2 and provides everything needed to execute a safe and capital efficient strategy. Aside from supporting a huge range of assets, Enzyme can be connected to all of DeFi, making it possible to create a strategy and make efficient returns on it.
Unslashed reached more than $ 100 million in TVL in a private launch. Those familiar with Unslashed know that it is the most smartly designed insurance infrastructure currently available in DeFi. The capital efficiency baked into the design serves as a win-all for insurers, insurance buyers and the stakeholders of both protocols. “
– The enzyme team
The unslashed approach to insurance
Unslashed focuses on building a protocol that allows the creation of structured insurance products called “Buckets”. A bucket is a diverse collection of insurance policies that have been carefully designed, reviewed, priced and curated so that providers of capital can underwrite.
Each Bucket has a different risk profile, contains different policies and generates a different return. In traditional finance, similar products are called ILSs. They provide a yield that is not correlated with the market, while creating a necessary bridge between finance and insurance.
Unslashed offers smart contract risk insurance policies, validator slashing (PoS networks), exchange hacks, stablecoin pegs, and more. This is combined with a qualitative and quantitative approach that covers multi-dimensional blockchain risk to ensure policy buyers are always protected.
Policy protection is only as good as the claims process underlying it. The claims process with Unslashed is unbiased and relies on independent assessors and arbitrators. This ensures that claims are handled fairly and in a non-discretionary manner.
The last part of a successful insurance market is capital efficiency. Insurers are left with enormous amounts of capital from insurers. Letting that capital sit and collecting dust is simply not efficient.
This is where Enzyme comes in …
Enzyme as a natural infrastructure choice
Enzyme’s DeFi infrastructure supports more than 200 assets and is connected to all types of protocols. Enzyme Vaults can handle loans, SMP pools (eg Uniswap and Curve pools), staking (eg Curve LP tokens or just ETH), semi-automatic farming strategies, leverage and more.
The modular and extensible design allows teams like Unslashed to build alongside the protocol and extend it into a new use case, allowing them to get to market much faster and at a fraction of the cost.
Using Enzyme as Infrastructure – Unslashed can rely on Enzyme’s network of developers and security experts (Enzyme Council, Chain Security, PWC and Open Zeppelin), outsource the maintenance burden and free themselves up to focus on building out their insurance protocol.
Why provide (subscribe) capital on Unslashed today?
Providing capital to underwrite Buckets on Unslashed offers a number of benefits as far as DeFi insurance goes, including:
- The buckets diversify the risk Insurance in crypto needs insurers and no one wants to put all their eggs in one basket – especially given the technical barriers to understanding how crypto systems work If underwriters cannot be recruited, credible guarantees cannot be realized against the risks in crypto. Diversifying risks is a solution that spreads risks and makes it much more comfortable to underwrite via buckets.
- Partnership with Enzyme helps grow bucket capital with simple farming strategies that combine – By allocating the capital within the Buckets through Enzyme, it can achieve returns. Simple farming strategies that deliver compound yields can generate up to 20% yield on ETH, which already creates an extra buffer of security when claims are triggered, but also means that the Bucket can remain profitable even if multiple claims are made.
- Earn premiums from buyers of coverage – Premiums paid by coverage buyers are also added to the bucket, adding another income stream for capital providers.
- Take advantage of a generous mining program lasting up to 10 years – Unslashed has launched a generous capital mining program that has been running for 10 years.
Benefits of Buying Coverage on Unslashed
The benefits of purchasing coverage on the Unslashed and Enzyme Combined System include:
- Cheaper premiums – With the capital efficiency gained by connecting to Enzyme, some Unslashed premiums could now afford to drop.
- Transparency over capitalization and risk management – The pooled approach helps spread risk and increase underwriting capital. The Enzyme system provides complete transparency on how the capital is deployed and users can compare this to how much coverage has been purchased. The Unslashed model gives users access to low insurance premiums and stronger security guarantees. Until now, it was possible to get just one or the other in DeFi. The Unslashed, Enzyme partnership means that users no longer have to choose between the two.
Benefits for the Unslashed Community:
- Enables Unslashed by enabling them to get to market with a secure and advanced product in a fraction of the time.
- Offer higher returns to capital suppliers, in ETH, on top of the capital mining rewards and premiums earned in ETH. In a sustainable way, this could almost double the total yield.
- Allows them to focus on products (different insurance protocols) and perfect their different risk assessments.
- Allows them to focus on growth and market share without the burden of asset management protocol maintenance and security considerations
- Faster growth could be better for the USF token.
Benefits for the Enzyme Community:
- Bringing a new use case to Enzyme that helps grow assets under management (AuM).
- Working with insurance experts instead of Enzyme trying to develop this use case itself.
- Direct benefits to the MLN token (after implementation of MIP7).
Unslashed will then run this through their management process, after which the capital deployment can begin. A bridge between the two protocols has already been built and fully controlled by Chain Security.