An Overview: DeFi Insurance Protocol Solace Goes Live
WILMINGTON, Del., Oct. 23, 2021 /PRNewswire-PRWeb/ -- Insurance protocol Solace, covering Aave, Compound and Uniswap products among others, has gone live after eight months of development and four months on the testnets.
While not decentralized yet, the protocol is heading that way, according to its documentation. It manages risk through analytics, instead of voting or staking, with the goal of helping liquidity providers hedge their risk when there is potential of smart contract exploits.
"As a user, I don't trust the current mechanisms like voting, staking or market forces, in other words 'wisdom of the crowd,' to accurately evaluate risk exposures and predict losses," said Solace founder Nikita Buzov. Instead, Solace offers coverage for minting vulnerability, flash loan attacks, trojan fake tokens, proxy manipulations, math errors and re-entry attacks according to its website.
Solace said insurance claims will be automatically validated and requested within the network, and payouts will be made in a single transaction. The protocol describes itself as "censorship-resistant" and does not feature a know-your-customer (KYC) method.
"DeFi'ed insurance is a great idea and I'm excited to see where this product goes" said attorney Mark Billion. But," he cautions, "The jury is out on what is covered, and what a policy holder can do in the event that they disagree with any given outcome."
Solace received financial grants from Polygon, NEAR and Aave.
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