Enzyme, a blockchain asset management platform, has announced a new partnership with Unslashed, a protocol that enables the creation of structured insurance products to create a new capital-efficient DeFi insurance protocol that allows collateral to generate a return on top of standard premiums and USF mining.
Enzyme recently introduced its version 2 and offers everything you need for a secure and capital-efficient strategy. In addition to supporting a wide variety of assets, Enzyme integrates with DeFi so that a strategy can be created and an efficient return on investment can be achieved.
“Unslashed raised more than $ 100 million to TVL in a private launch. Those who know Unslashed will know that this is the smartest insurance infrastructure available in DeFi. The capital efficiency brought into the design is a win for insurers, insurance buyers and stakeholders. “
– The enzyme team
The unrestricted approach to insurance
Unslashed focuses on creating a protocol that can be used to create structured insurance products called “buckets”. A bucket is a diverse collection of insurance policies that are carefully designed, rated, rated, and compiled for investors to subscribe to.
Each bucket has a different risk profile, has different policies, and generates a different rate of return. In the traditional financial world, similar products are referred to as ILS. They offer a return that is unrelated to the market while creating a necessary bridge between finance and insurance.
Unslashed offers insurance policies for smart contract risk, validator slashing (PoS networks), exchange hacks, stablecoin pegs and more. This is combined with a qualitative and quantitative approach that covers multi-dimensional blockchain risks to ensure that policy buyers are always protected.
The insurance cover is only as good as the application process on which it is based. The Unslashed application process is impartial and relies on independent reviewers and arbitrators. This guarantees that claims are treated fairly and not discretionary.
The final component of a successful insurance market is capital efficiency. Insurers sit on huge amounts of capital from insurers. Allowing this capital to sit and collect dust is just not efficient.
This is where enzymes come in …
Enzyme as a natural infrastructure
Enzyme’s DeFi infrastructure supports over 200 assets and is connected to all types of protocols. Enzyme Vaults can manage loans, AMM pools (e.g. Uniswap and Curve pools), stakeouts (e.g. Curve LP tokens or just ETH), semi-automated farming strategies, leverage and more.
The modular and extensible design allows teams like Unslashed to put the protocol together and expand it to a new use case so they can get to market much faster and at a fraction of the cost.
By using Enzyme as an infrastructure, Unslashed can draw on Enzyme’s network of developers and security experts (Enzyme Council, Chain Security, PWC and Open Zeppelin), outsource maintenance and focus on building their insurance protocol.
Why provide underwrite capital today at Unslashed?
Providing capital to subscribe to Buckets on Unslashed offers a number of benefits, including:
- The buckets diversify the risk – Insurance in crypto needs insurers, and nobody wants to put all their eggs in one basket – especially given the technical barriers to understanding how cryptosystems work. If underwriters cannot be attracted, then credible guarantees against the risks in crypto cannot be realized. Diversifying risk is a solution that spreads the risk and makes drawing over buckets much more convenient.
- Partnering with Enzyme helps increase the bucket’s capital through simple, compound farming strategies. By allocating the capital within the buckets via enzymes, a return can be achieved. Simple growing strategies with compound yields can generate a yield of up to 20% on ETH, which already creates an additional safety buffer if claims are triggered, but also means that the bucket can remain profitable even if multiple claims are asserted.
- Earn rewards from cover buyers – Premiums paid by cover buyers are also added to the bucket, giving investors another source of income.
- Benefit from a generous capital mining program that lasts up to 10 years – Unslashed started a generous capital mining program that has been running for up to 10 years.
Benefits of Buying Cover on Unslashed
The benefits of purchasing coverage for the Unslashed and Enzyme Combined System include:
- Cheaper premiums – With the capital efficiency achieved by plugging in enzymes, some unreduced premiums could now afford to drop.
- Transparency overcapitalization and risk management – The pooled approach helps diversify risk and increase subscription capital. The enzyme system provides complete visibility into how the capital is being used and users can compare this to the amount of coverage purchased. The “not slashed” model gives users access to lower insurance premiums and stronger security guarantees. So far it has only been possible to get one or the other in DeFi. With the unslotted enzyme partnership, users no longer have to choose between the two.
Community not slashed benefits
- Enables Unslashed by allowing them to get to market in a fraction of the time with a safe and sophisticated product.
- Offer higher returns to investors in ETH, in addition to the rewards for capital reduction and the rewards earned in ETH. This could enable a sustainable doubling of the total yield in a sustainable way.
- 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 having to adhere to the asset management protocol and security concerns
- Faster growth could be better for the USF token.
Enzyme community benefits
- Introduced a new use case for enzymes that can help increase assets under management (AuM).
- Instead of Enzymes trying to develop this use case on their own, work with insurance experts.
- Direct advantages for the MLN token (when implementing MIP7).
Unslashed next takes this through the governance process after which capital provisioning can begin. A bridge between the two protocols has already been built and fully checked by Chain security.