NAOS Finance And Tidal Finance Collaborate To Insure Lenders for Real World Asset Loans
Following the previous strategic collaboration with NAOS, we are thrilled to bring on a new type of insurance policy, also the first in the space, onto the platform — Real world asset loan insurance. Policy is underwritten in joint effort with NAOS, to cover 100,000 USD for lender’s loss in case of the borrower’s default, with NAOS’s insurance (beta) pool covering another 100,000 USD.
It is the first case to apply DeFi insurance with real world assets loans, and an important step to expand the DeFi insurance horizon beyond smart contract coverage. Lender and borrower’s information, payment history, are also being brought onchain to make such insurance cases feasible with policy verification and claim process.
In this particular case: company A is borrowing 3 million USD from the lender (the NAOS lending pool), with a 10% annual interest rate. Tidal will cover upto 100,000 USD out of the 3 million, and NAOS Beta pool will cover another 100,000 USD. The annual premium of insurance is 3%.
NAOS coverage pool is currently open for deposit, policy will become effective on March 27th as well as the USDC deposit earnings.
In the case of default, when the non-payment amount is over the default threshold, the default will be triggered and the amount of loss will be calculated to disclose to both Tidal and NAOS community.
We truly believe this is an important milestone for DeFi insurance by expanding our use case into the real world — There are trillions of business loans being covered by traditional insurance, and risks are well quantified with historical data. With web3’s adoption, the insurance use case will continue to expand and evolve.