YIELD App, the decentralised finance (DeFi) management platform has announced that it is partnering with its new partner project, a new DeFi insurance protocol Steady State, which plans to completely transform the cryptocurrency protection landscape.
Currently under development, the Steady State protocol will pioneer a new standard of insurance in DeFi that will be led by deep, quantitative data analysis and complex risk modelling delivered through automated smart contracts underpinned by a governance DAO and a fully liquid secondary market.
In contrast to the predominant model in DeFi insurance, Steady State will protect platforms and protocols against losses, rather than place the burden of insurance on individual users. It will do this by developing and deploying a rich understanding of the risks faced by cryptocurrency providers that will allow Steady State to comprehensively price and cover potential financial loss.
YIELD App, which to date supports more than 40,000 users globally to invest their USDT, USDC and ETH for an APY of up to 20%, is supporting Steady State with the view to becoming one of its first customers.
Commenting on the development of Steady State, Tim Frost, CEO of YIELD App, says: “We have long been of the view that the DeFi insurance market is lacking. Our search for an adequate protocol for our own platform led us to take an interest in Steady State, which we believe has the potential to transform the cryptocurrency protection landscape.
“As we have commented before, the one major factor holding back mainstream adoption of cryptocurrency is its risk profile. While no investment is risk-free (even, or especially cash in some regions) a high number of hacks and exploits has been discouraging for new users that might be convinced to enter the market if their assets were adequately insured.”
Strengthening and transforming DeFi insurance
Steady State’s risk-based approach mirrors methods found in traditional insurance markets, where a full and complex understanding of risk allows institutions to provide adequate, fully customised cover for providers and their customers.
Utilising the tools of DeFi, however, Steady State will create a rewarding, 360-degree ecosystem in which users are able to become stakeholders at any insured platform by adding capital to insured pools in return for a premium. Secondary trading opportunities will further strengthen the Steady State offering and help to support the entire ecosystem.
Jonathan Libby, the founder of Steady State, comments: “Steady State is what every member of the DeFi community has been waiting for: an insurance product that understands and can accurately price the risks faced by platforms and their users. It shouldn’t be down to individuals to cover their assets in arbitrary pools – we need a system that looks a lot more like traditional finance to help reach everyone that stands to benefit from the new economy emerging on the blockchain.
“We have been working closely with YIELD App from our earliest stages and will continue to do so over the coming weeks and months to develop and deliver a product we believe will break new ground in DeFi and cryptocurrency more widely.”
