Each account is eligible to be covered by more than $50,000 as well. If you are planning on having an account larger than $50,000 then please reach out to us here and we will gladly accommodate your coverage.
At Outlet the most important thing is protecting your assets. We do this by paying a 3rd party, Nexus Mutual, to protect your funds from risk associated with the protocols Outlet uses to earn you the best possible yields.
Anything that involves money, has some risk associated with it. Nexus Mutual allows us to minimize this risk. Nexus Mutual's "Smart Contract Cover is intended to provide protection against material loss of value resulting from unintended uses of the underlying protocols. In practice, this means that a vulnerability in the smart contract code that governs the protocol has been exploited and a material amount of value has been drained or made permanently irrecoverable."
Outlet accounts are insured using a smart contract insurance provider. The money you deposit into Outlet gets exchanged into digital dollars and used to back loans on alternative money markets. Your money is then insured against the risk of the code (smart contract code) that powers the money markets failing and causing you to lose funds.
You can get a more technical definition and wording of the coverage here.
The idea is to pay claims where a genuine loss has occurred but not pay claims where members are trying to game the system. This can never be fully captured by words and must be interpreted by the membership base as a collective group.