Why Staking Pools Need Insurance Protection?
Uno Re relies on its community’s participation to achieve its goal of changing the DeFi insurance and reinsurance landscape for the better. Our staking pools play a vital role in our ecosystem as they provide us with the funds we require to insure DeFi protocols and their users against smart contract hacks.
A huge majority of other DeFi projects also adopted the staking pool model to offer their users the chance to utilize their native tokens in rewarding staking pools. This model helps DeFi projects to expand their user base, establish stronger ties with their community, and gather the necessary funds to support their projects. Users, on the other hand, enjoy high APRs and earn passive income with minimal effort and energy. But, there is a but.
Smart contracts are the building blocks for everything we have within the DeFi space, including staking pools. If there is a small crack in the smart contract on which the staking pool is built, hackers take it as an opportunity to exploit the crack- in other words, the bug, and drain the staked assets.
Unfortunately, this is not just a probability, but a very frequently occurring possibility — staking pool hacks have already happened several times. Most recently, Earnhub’s staking pool got attacked, resulting in a permanent loss of assets for stakers.
It is worth mentioning that most of the compromised protocols have had their codes audited — sometimes multiple times — from a variety of reputed audit firms. However, the fact that even audited protocols get hacked further proves why insurance for crypto assets is absolutely essential to maintain a sustainable, safe, and long-lasting crypto ecosystem.
If DeFi is to thrive, it should employ the necessary methods to protect its users’ assets. Because hacks do severe damage to trust users seek before investing in DeFi projects, such incidents cause new users to shy away from stepping into the DeFi space altogether.
DeFi insurance is the only valid solution we have, because smart contract bugs and malicious actors are not going anywhere anytime soon. Despite this fact, insurance relieves users from constantly worrying about the security of their staked assets and protects them from falling victim to a hack.
Uno Re is proud to be protecting its partners’ staking pools against smart contract hacks. We recently joined forces with OwlDAO to provide insurance coverage to their staking pool for up to $300,000. We are also safeguarding Umbrella Network, and Nord Finance users’ staked assets for up to several million dollars combined.
Uno Re’s Cover Portal to the Rescue
Our soon-to-be-launched Cover Portal will be the ultimate solution to users’ concerns about the security of their staked tokens.
The Cover Portal- a unique platform the likes of which have never seen in DeFi before, will scan users’ wallets, detect the assets users staked, measure any possible risks using an AI-based algorithm, and allow them to purchase coverage for any token in their crypto wallet instantly.
Upon connecting their wallets, users will be presented with insurance coverage options for all their staked assets. The abundance of DeFi platforms and staking pools can cause users to forget where their assets are since most users have a diversified portfolio. The Cover Portal will detect any insurable staked asset and allow users to get coverage in seconds.
Additionally, we’re aware that users have concerns about the heavy gas fees associated with the ETH network and are happy to let our users know that the Cover Portal will be 100% gasless!
About Uno Re
Uno Re is the world’s first decentralised insurance and reinsurance platform, allowing the community to invest and trade in ‘risk’ and receive sizable returns on their investments in one of the safest asset classes in the world. The platform will break barriers to entry for the retail investor by doing away with the historic pre-requisite of absurdly high capital generally needed to invest into the market while also introducing much-needed transparency into the industry as a whole. Uno Re will also allow the community to propose innovative insurance products to the space, thus propelling a new generation of Insurtech companies powered by the Uno Re ecosystem.
