Setting a new standard: ParaSwap utilizes Unslashed Finance as an integrated solution for its insurance needs
With the launch of the PSP Token, we saw the birth of staking and multiple incentives driving ParaSwap’s Private Market Makers to be even more competitive and efficient. With this, came an influx of PSP into several staking pools. In a move to protect its users from issues that could arise from smart-contracts, ParaSwap purchased a $30m coverage from Unslashed Finance — the first instance of a liquidity aggregator purchasing bulk coverage for its users.
ParaSwap and the PSP Governance Token Launch
ParaSwap is a liquidity aggregator network backed by industry-leading Market Makers and connected to more than 90 liquidity venues (DEXs, AMMs, etc.) over 4 different networks (Ethereum, BSC, Avalanche and Polygon). ParaSwap allows users to stake their PSP tokens — any amount of PSP — without having long locking periods or maintaining any infrastructure. PSP holders use staking to support their preferred Market Makers in exchange for a share of their rewards (currently yielding more than 170% APY).
After only 72 hours, ParaSwap had more than 37 millions PSP tokens staked in their contracts, deposited amongst more thousands of stakers. The partnership between Unslashed Finance and ParaSwap serves to protect stakers against issues that could be associated with their smart contracts, mitigating one of the fundamental risk factors associated with staking.
This partnership also covers the risks of the V5 swapping contracts, the timelock and DAO multisigs as well as the vesting contracts, allowing full stack coverage and protecting all stakeholders.
Insurance as a competitive advantage?
The status quo within the defi insurance industry has been to allow users to buy and handle their own coverage. Historically, protocols have put the burden on their users to insure themselves. When this happens, it is the user who ends up footing the bill, not the protocol.
The purchase of bulk insurance for its users by ParaSwap is monumental and offers significant benefits to the ParaSwap DAO in several ways:
- It provides a smoother experience for users and fosters inclusivity
- It builds trust between ParaSwap and its users and demonstrates how important protecting its users really is
- It sets the precedent that insurance is a must-have
- It encourages more money inflows into the $PSP token by making staking more secure
ParaSwap x Unslashed Finance
With its purchase of insurance for over $30m, ParaSwap and Unslashed are making history. The importance of this cannot be stated enough, as it signals the intention of a platform to protect its users rather than having them go out and purchase coverage on their own. This leads to a symbiotic relationship between the platform and its users, encouraging the onboarding of new users who may be more risk averse.
It is our hope that other projects will follow ParaSwap’s lead in taking the initiative to purchase coverage for its users and helping to transform the current insurance landscape into one that offers inclusion and safety for users across the board.
At the end of the day, protection for your assets should not be a luxury, but rather an inherent right. Participation comes with risks, and Unslashed Finance aims to mitigate and ultimately nullify those risks. This partnership is just a step towards that goal. It is our priority to stay at the forefront of the insurance market and make sure that projects have access to the tools they need in order to protect both themselves and their users.
Unslashed is a decentralized insurance protocol covering all common risks for crypto assets. Unslashed enables almost instant liquidity to insurance buyers and risk underwriters, ensures constant collateralization, and guarantees transparency through an unbiased claims process. By tokenizing coverage and using “money streaming,” it allows maximum flexibility and freedom: the insured pay as they go and can instantly stop the policy to offload it at any time. Unslashed has already sold more than $1.23 billion (308K ETH) worth of notional value across different protocols and policies. Unslashed is insurance without the bureaucracy. For more information, please visit https://app.unslashed.finance/cover
ParaSwap aggregates the liquidity of exchanges and lending pools to provide a comprehensive access point to Ethereum’s decentralized finance ecosystem.
With a robust infrastructure harnessing relevant decentralized solutions such as Chainlink’s Price Reference Contracts, a 6500 ETH Unslashed Finance coverage, ParaSwap consistently provides its users with the best prices.
If you’re a developer and want to enable access to DeFi services for your DApp users, feel free to reach out. We maintain a single access point seamlessly enabling speedy access to 15+ protocols, consistently, check ParaSwap’s documentation.