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FairSide is a DeFi insurance protocol that aims at offering the most comprehensive and fair cover. It leverages its cost-sharing network to provide crypto users the same benefits as traditional finance insurance.
FairSide co-founder Brandon Brown said that their approach to DeFi insurance is much broader than their competitors. The company offers subscription-based coverage to protect users’ crypto portfolio in numerous events, including smart contract exposures and wallet attacks.
Therefore, their coverage extends beyond DeFi and resembles more of insurance for a traditional finance portfolio.
Insurance without policy
Another exciting thing about FairSide is that they don’t have an insurance policy. Brown explains why by saying:
“You’ll have a membership agreement that’ll describe the types of losses that we cover… we really don’t need to exclude things because we’re really definite in what we’re covering.”
That’s why the company doesn’t feel the need to document a policy for each individual. FairSide decides what they’re covering based on events, not amounts and numbers, Brown stated. The protocol vote on incidents that could cause significant losses, and if they decide to cover that incident, it is covered for all users.
As long as users can provide proof of loss showing that they were a part of the exploit, their losses are automatically covered via smart contracts. FairSide continuously grows its list of covered events. Each newly added event is also added to all existing users as well.
FairSide leverages its unique protocol called Network Staking, which refers to the ability to stake the entire network in just one staking function. User binds their coins to FairSide’s capital pool, and they mint FSD, the protocol’s native token.
The FSD token behaves as a synthetic to the capital pool, and the price changes algorithmically based on the market conditions to keep the balances. FairSide’s website describes this function and states:
“Network Staking diversifies the risk by spreading it across the entire network. Since there is no correlation to a specific project, paid claims produce fractional, non-permanent losses to stakeholders.”
FairSide is keen on expanding its protocol beyond DeFi and crypto. Brown said that the team was aware of the high number of use cases that could leverage their protocol, and FairSide is looking to put them into practice one by one in the future.
The post Protocol level insurance for DeFi with no exclusions – the future of InsureTech? – SlateCast #20 appeared first on CryptoSlate.
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