Solace, a De-Fi Insurance Protocol is Officially Live

Solace is providing DeFi users with blockchain-based coverage policies delivered by our DAO.

We are live! After 8 months in development and 4 months on the Ethereum Rinkeby and Kovan testnets, Solace is here and ready to provide you with the best DeFi protection out there.

If you’re new to our platform, understand that Solace is a risk management protocol for the DeFi space. We offer various coverage policies for liquidity providers, DAOs, or the DeFi protocols themselves. As of today’s launch, we offer coverage policies for users on the popular Ethereum-based DeFi platforms like Aave, Compound, and Uniswap. We’re also proud to be supported by grants from Polygon, the NEAR Protocol, and Aave themselves.

While DeFi is a wonderful innovation, we know how risky it can be. That’s why we built Solace, to make your DeFi experience safe, secure, and transparent.

The idea for Solace started off from a user perspective a little over a year ago as our Founder, Nikita Buzov, was deploying funds in different DeFi apps and farming. Assessing and hedging the risk was tough, so, at first, he was quite excited to see the first coverage products to enter the market.

But once he learned what those coverage products are and how they work, he thought there must be a better way. Given how much liquidity is protected through coverage today it’s clear that he was not the only one unhappy with the current product offering. So then he started researching further into the issue and architecting something better for the space.

Solace features a single capital pool to underwrite risk across every policy offered. This pool is funded by capital providers, who earn revenue from policy sales and Solace incentives. The underwriting pool will be available on multiple blockchains in the coming weeks, including Polygon, Aurora, and others.

Claims are automatically validated within the Solace network and payout in a single transaction. The platform calculates exactly how much was lost and pays it out to the policyholder.

There are a few points to really focus on. The first point is simplicity and usability. Most powerful tools are simple and easy to use. With Solace, you don’t have to understand how the protocol works “under the hood” to use it, not even read the docs, just visit solace.fi and buy coverage. Everything should be self-explanatory without a knowledge barrier. Second is confidence in the claims assessment process. Claims must be fast and reimburse financial loss for applicable covered events. Easy to say, hard to implement.

As mentioned, claims processed by Solace are validated immediately and payouts happen in a single transaction, all thanks to our parametric automated system. We’re happy to have removed reliance on human input and committees and streamlined the process.

Third is risk assessment. As users of DeFi networks ourselves, we don’t trust the current mechanisms like voting, staking, or market forces, or in other words, “wisdom of the crowd”, to accurately evaluate risk exposures and predict losses. It takes more than that. Solace is driven by an analytical approach and incentivizes intelligent risk assessment through an architecture where people can offer their risk assessment models and earn fees for managing risk.

Solace may provide security and safety in a new financial world, but we’re really about building a community of team members, investors, designers, and more. Plus, we’re governed by the Solace Launch DAO, which is full of wonderful members, such as the founders of Polygon, Axie Infinity, Zerion, and Alchemy, who have helped our vision come to life. The more participants Solace has, the more risk managers and coverage policies we’ll see. Additional capital providers means more liquidity to underwrite risk. Solace is a platform that cannot run without dedicated users, and we’re proud of that.

Should Solace succeed, DeFi won’t be seen as a wild, uninsured minefield. Instead, we’ll build up trust through the people, and show institutions and investors in the traditional space that decentralization isn’t so bad.

We have a lot of work to do in the coming months. The immediate plans include cross-chain expansion, as Solace will soon deploy on Polygon, Aurora, and other EVM-compatible chains throughout November and December. Then users can expect more coverage products to become available as Solace helps risk managers to deploy their risk assessment models and products. Next, is the transition to a community-run DAO, which we expect to happen by the end of the year.

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About Solace

Solace is a decentralized coverage protocol, insurance-alternative, that allows DeFi liquidity providers and market makers to hedge their risk in the event of smart contract exploits. Solace advances risk management of decentralized financial products by efficiently making coverage policies available to liquidity providers and other protocols. For more information on the Solace protocol and to find out how you can contribute, head to Solace.fi

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