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The Recap of AMA With Tidal

On August 12, StaFi invited Chad, the Co-founder and CEO at Tidal to the StaFi community to talk about the latest development of Tidal and cooperation between Tidal and StaFi.

The full Recap content is organized below.

1.Please give a quick summary of tidal.

Chad: Tidal is an insurance marketplace that connects insurance sellers and buyers to cover smart contract hacks. Tidal offers the functionality to create custom insurance plans for one or more assets from multiple protocols. The main objective of the platform is to maximize capital efficiency and return to attract reserve providers, while also offering competitive insurance premiums to attract cover buyers. We are excited to be collaborating with StaFi team.

2.StaFi and tidal have been working together behind the scenes for a while, now that tidal has launched, what exactly is being covered?

Chad: The current coverage plan covers StaFi’s smart contract vulnerabilities that are deployed on the Ethereum network, including the rETH App and rBridges. Malicious attacks and economic exploits resulting in StaFi users’ asset loss would also qualify for a valid claim.

3.What’s the premium pricing for this coverage policy and how is it being determined?

Chad: The cost to the StaFi team at the moment is 2% yearly, meaning getting 1 million in coverage would cost 20k a year or just $385 a week. The cost is deducted on a weekly basis and automatically adjusted to the max level of reserve. The premium pricing is determined with a few parameters: how long since launch, code complexity, TVL, product team, and comparisons to reasonable pricing within the market.1% to 5% yearly cost is the most common price seen on the market.

4.Could you elaborate a bit more on the weekly payment model and reserve adjustment?

Chad: Sure, on Tidal the payment from the buyer is made on a weekly basis instead of all upfront. It’s more like a subscription model than a one time payment, which makes it more flexible — buyers can adjust the coverage amount up and down every week for their needs.

In addition, the purchased amount will also be adjusted with the reserve level to avoid overpaying. Meaning if the reserve falls shorter than the purchased amount, the cost of that week will also be less. For example, let’s say StaFi’s current target is to get 1 million in coverage, if there is only 900k in reserve, the actual coverage for that week will be 900k and the cost will be based on the amount of the 900k coverage.

5.In what (stable)coin is the coverage held?

Chad: As of right now only USDC. Later we may add other stable coins as well as ETH and WBTC.

6.What’s the guarantor on the Tidal platform?

Chad: Guarantor is a new feature we designed to further collaborate with the insured party, in this case, the guarantor would be the StaFi team and their community. Guarantor pool takes FIS token as deposit, earns 5% of the cover premium paid for its guaranteed protocol + TIDAL token incentives.

The Guarantor pool takes on a certain risk as well: Under a payout event, 10% of the claimable amount against the token price the day before the hack is distributed to the reserve providers. E.g. a 100k USDC total payout amount would result in 10k USD worth of tokens to be paid out to reserve providers.

The purpose of guarantor pool is to offer a certain recovery for the reserve providers once a payout happens, which is important to support a healthy level of reserves taking a higher level of risk providing coverage.

7.What’s the payout process (Assume there is an exploit, how are both teams are handling the claim)

Chad: a.The StaFi team files a claim on Tidal (need to file within 3 days of the incident).

b.The Tidal risk committee verifies the hack (normally less than 1 day). The USDC reserve pool of StaFi freezes.

c.Tidal team, auditor partner, and StaFi work together for the post analysis to determine the amount of loss, hence the USDC amount to payout.

d.Tidal team submits a proposal of the USDC amount to be paid out, the amount of FIS token, and TIDAL token as reimbursement for the USDC providers.

e.Tidal DAO votes to pass the claim amount. (Tidal token holders are not USDC reserve providers, in order to avoid conflict of interest).

f.Risk committee confirms the results.

g.Payout to StaFi team/treasury.

8.Who is in the Tidal risk committee at the moment?

Chad: There are 4 members at the moment, 2 from the Tidal team and 2 from the Halborn security audit firm. As the DAO becomes mature, we would like to select more security specialists from the community to participate in the risk committee.

9.How is tidal helping StaFi bootstrapping reserves?

Chad: a.We are currently rewarding the StaFi reserve pool via TIDAL token on a weekly basis.

b.90% of the USDC weekly premium payment also goes to StaFi’s reserve pool.

We are working on another incentive approach to reward reserve providers FIS token as well. It would be really helpful to boost the reserve amount.

10.What’s next to come with StaFi and Tidal?

Chad: a.Grow the USDC reserve level higher in order to cover more TVL.

b.Open guarantor pool a new module to grow the reserve by rewarding FIS token to the reserve pool as well as TIDAL token.

d.Regarding the timeline we are looking at 2 weeks to get all these implemented.

11.Who are your competitors and what’s unique about Tidal?

Chad: Nexus mutual being the major player in the space, compare to them tidal has couple unique offerings:

Directly serve the protocol team instead of retails. This greatly increases the efficiency and quality of claim and payout.

Weekly subscription plan auto-balanced with reserve, buyer never pays more than what’s in the reserve.

We offer a customizable plan for the reserve providers, so that they are not tied to the risk exposure they don’t want. Update selection or withdrawal takes only 1–2 week.

About StaFi

StaFi is the first DeFi protocol unlocking liquidity of staked assets. Users can stake PoS tokens through StaFi and receive rTokens in return, which are available for trading, while still earning staking rewards. rToken is a synthetic staking derivative issued by StaFi to users when users stake PoS tokens through StaFi rToken App ( rTokens are anchored to the PoS tokens staked by users and the corresponding staking rewards. rTokens can be transferred and traded at any time.

rToken App:
Twitter: @Stafi_Protocol
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