Introducing Opium Insurance
Decentralised, tokenized and extremely flexible
The problem it solves
Pioneers, blazing a trail into little-known territory are always at greater danger than those who follow in their footsteps. It’s hardly surprising, therefore, that the pioneering spirit of DeFi traders exposes them to significantly more risk than their fellow traders, not least in the areas of smart contract exploitation and stablecoin fraud.
Faced with such irreconcilable risks, even the shrewdest strategy is doomed to failure, transforming the serious act of trading into little more than a casino game. That’s why we developed a tool that comes specifically to the aid of DeFi traders, allowing them to hedge the risks that exist in this pioneering market.
“Be like a hedge fund — only take risks you are willing to take, hedge the rest!”,
-Andrey, founder of Opium.
Opium Insurance at a glance
We developed Opium Insurance in response to piles of feedback you’ve been sending us over the past few months. Opium presents a brand-new approach to our products — offering insurance to the DeFi community in a form we think you’ll be very familiar with.
What you can do with Opium Insurance:
- Opium Insurance is tradable: you can buy it or sell it as the need arises.
- You can choose from different types of insurance: from insurance against smart-contract hacking to insurance against stablecoin default.
- You can decide to take some risks/stake money into the pools and earn extra returns.
“Hedge funds hedge funds — hence the name.”
— Andrey, Opium
We’ll be launching the product itself soon. For now, though, we want to tell you more about how Opium Insurance will help you.
Use cases
How can newbie traders minimize simple risks like the insolvency of USDT (Tether)? Because their income directly depends on the belief/trust that their USDT tokens will be worth one dollar each. However, you can never be 100% sure that will always be the case.
But if something happens, and the USDT drops to less than a dollar, no matter how successful your strategy is, you will lose the value stored in your USDT tokens. That’s the inconvenient truth.
With Opium Insurance, you are buying protection against eventualities like these, and the market will determine the price you pay.
“Opium Insurance allows you to sleep well, safe in the knowledge that your incomes are protected.”
Which would you choose: A 9% return, knowing you risk losing everything at any moment, or a stable 7% return — guaranteed by “sacrificing” 2% to cover your insurance and your peace of mind?
But that’s not all; it gets even better: you can potentially stake your quality tokens as aToken, yTokens, etc. to guarantee the return and thereby double earn! In this case, your risk/return will also be lower because your portfolio is more diversified.
Under the hood: how it works
With Opium Insurance we are launching the first Peer2Pool product built on the Opium Protocol!
Yet more good news: with Opium, our users always have an order book logic underneath the products, but as this kind of structure is familiar to most DeFi users, we decided to simplify the use of Opium for you.
Insurance buyers select an insurance product, pay a premium to the pool and receive a tokenized insurance position. This position can be traded on secondary markets and can be used to claim a payout in the case of successful insurance claims.
Opium is a non-custodial protocol; it does not sell you insurance. The insurance is sold to you by other users who are willing to take the risk. It is guaranteed by the full collateral locked in smart contracts!
Insurance sellers stake their capital in an insurance pool and receive a liquidity provider token. They earn income on their deposit because the premium paid by buyers is added to the pool.
Spoiler: you can stake your tokens to participate in liquidity mining of $OPIUM
And our final item of tremendous news: Opium will be opening a liquidity mining program for everybody in the pool! Be the first one on your block to find out how to do it and how much $OPIUM you’re going to get.
Try out Opium Insurance today!
Stay informed through following us on Twitter, joining our Telegram chat and announcements channel.
