Outlet Smart Contract Insurance

Outlet accounts are insured using a smart contract insurance provider. The money you deposit in outlet is lended to certain DeFi protocols and is then insured against the risk of that smart contract failing.

The most common question we get asked is about our insurance. We wanted to take this article and speak to our users about the insurance that protects them. Outlet is the first decentralized finance product that natively integrates insurance into its platform. If you are looking for insurance on your DeFi account Outlet will cover your account.


Outlet has a special form of insurance that uniquely aligns with our product. Outlet is protected against smart contract risk.

Our smart contract insurance covers the following.  The insurance will cover “unintended code usage” where someone, not necessarily the cover purchaser, has suffered a financial loss on the smart contract. As an example, the cover would pay out on the DAO hack, and the two Parity multi-sig wallet issues. It is not intended to pay-out on loss/misuse/phishing of private keys as this cannot be verified.


The Truth About Insurance In Open Finance

Insurance in the world of open finance is very new. The DeFi protocols that power open finance themselves are also extremely new. The technology that is powering the insurance is Nexus Mutual. Nexus Mutual is one of the first businesses of this type, and with time will become better and more sophisticated coverage.

Insuring A DeFi Account

Insuring your open finance portfolio can be done using several products. The right product for you will migitage whatever risk you think is riskiest. The best insurance is smart contract insurance in Outlets use case. If you are interested in learning the other risks involved in using decentralized finance tools you should read the whitepapers of projects such as MakerDao, Compound.Finance, and DY/DX.


Smart Contract Coverage

The description given by Nexus Mutual is vague. In this section we are going to clear up what is actually covered under the smart contract coverage provided to Outlet users. In a decentralized finance protocol there is an entity known as a smart contract. A smart contract is a decentralized way to programmatically moving some type of value across a blockchain. A smart contract can be seen on the public ledger of the blockchain it lives on. In Outlet’s case we utilize smart contracts on the Ethereum blockchain. The coverage on our contract covers the misuse of one of these smart contracts.


Smart contracts have been hacked in the past. The open finance and DeFi protocols we have chosen to work with have all been audited by top auditing firms in the space. Such as Openzeppelin. Smart contracts do have vulnerabilities and are the largest risk taken when interacting with a decentralized protocol.


Getting Insurance On Your DeFi or Open Finance Account

Getting insurance on your open finance or decentralized finance accounts/portfolios is simple when you use Outlet. Your Outlet account will come with insurance for free right out of the box if you sign up for the Beta. If you are using Outlet post beta you will have to pay for the insurance. The insurance will be the exact insurance explained above. Smart contract insurance. This will cover any amount of smart contract hack or loss in the smart contract itself.


Insured DeFi manager

A decentralized finance manager a new emerging product category in the cryptocurrency universe. It allows for users to see their positions between multiple protocols. Having insurance on your open finance manager is important to anyone who has an interest in maximizing their returns and hedging against the smart contract risk you take on as a user.


Outlet is not a traditional DeFi manager. We are an aggregator. We both manage and maximize your returns in the world of DeFi and Ethereum. Our higher tier accounts come with insurance for a paid subscription.


In conclusion

Outlets form of insurance is ran through Nexus Mutual and called smart contract insurance. Not only does outlet manage and maximize the DeFi experience it safely protects it by offering smart contract insurance placed on the smart contracts we are lending through.


Start Using Outlet

Originally Published By Outlet
    Categories:
    Outlet

Start Using Outlet