Risk Harbor
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Risk Harbor

Risk Harbor Core V2 launches Core Vault 2 on Arbitrum with support for Tracer Finance!

Today we’re excited to announce that Risk Harbor now supports the following pools for Tracer.Finance on Arbitrum:

  • 1-BTC/USD Long
  • 1-BTC/USD Short
  • 3-BTC/USD Long
  • 3-BTC/USD Short
  • 1-ETH/USD Long
  • 1-ETH/USD Short
  • 3-ETH/USD Long
  • 3-ETH/USD Short

With the Arbitrum integration, users can now purchase protection for the Tracer.Finance for the pools mentioned above on Arbitrum. Since Arbitrums’s gas prices are negligible with rapid transaction times, users can now perform all of these operations without having to worry about gas fees nor have to experience cumbersome transaction wait times.

About Tracer Pools

Navigate here and make sure the network is switched Arbitrum.

Underwriter Risks:

Underwriters in Risk Harbor V2 underwrite every protocol in the vault. The Risk Harbor Automated Market Maker (AMM) handles pricing and ensures that Underwriters are not overexposed to any particular pool in the vault. Each vault has its own Risk Aversion parameter which governs how willing the vault is to enter leverage and take on additional risks. This vault’s risk aversion parameter is Risk-On, signaling that risk aversion is relatively low. Underwriters will earn higher yields by underwriting a larger amount of protection while taking on greater risk.

Operating leverage signals the ratio of outstanding protection liability to underwriting capital. The higher the operating leverage ratio, the more levered the vault is. The more levered the vault is, the more likely the vault will be to be susceptible to default.

Risk is assessed using a combination of quantitative risk modeling, publicly available security data, systemic dependencies, and market conditions. The yield on each pool can provide an indication of how risky the protocol is by comparing the yield to quasi-risk-free rates elsewhere in the DeFi ecosystem. This rate comparison, combined with an efficient market hypothesis, allows us to price expected losses under ideal conditions. Correlated risks are assessed using quantitative risk modeling and dependency graphs.

Policyholder Risks:

If a hack occurs, the policyholder will be paid out in USDC. So unless USDC loses its peg, the underwriting capital will maintain its value. If another protocol in the vault suffers a default event before this pool does, then the vault may default and be unable to pay out the full value of the protection. This is unlikely to happen in the absence of a black swan event.

When does this protection pool expire?

This pool expires on approximately April 29, 2022.

Who can purchase protection?

Currently, all users can purchase protection.

About Risk Harbor

Risk Harbor is a risk management marketplace for decentralized finance (DeFi) that utilizes a completely automated, transparent, and impartial claims detection mechanism to protect liquidity providers and stakers against smart contract risks, hacks, and attacks.

About Tracer Finance

Tracer.finance is an open-source, smart contract protocol for derivatives governed by the Tracer DAO. The first derivative product to be released on the protocol is Tracers’ Perpetual Pools; a leveraged ERC20 token with no margin requirements and no liquidations. Broadly, the Tracer Factory is an array of financial smart contract generators. With Tracer, anybody can permissionlessly deploy a template installed in the factory, provided they have an oracle price feed to price it; and token to settle the agreement.

About Arbitrum

Arbitrum is a layer 2 solution designed to improve the capabilities of Ethereum smart contracts — boosting their speed and scalability while adding in additional privacy features to boot. The platform is designed to allow developers to easily run unmodified Ethereum Virtual Machine (EVM) contracts and Ethereum transactions on a second layer, while still benefiting from Ethereum’s excellent layer 1 security.

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