DeFi project Opium Protocol to launch insurance and staking service

The Opium Protocol, a crypto-derivatives platform supported by Galaxy Digital and Alameda Research, announced the launch of a risk-hedging service in the DeFi sector.

Opium Insurance offers the following features:

• the ability to buy and sell insurance as needed;
• a wide range of insurance types—from smart-contract hacks to issuer default on stablecoins;
• the ability to contribute assets to liquidity pools to earn additional returns.

“What will you choose: a 9% return with the risk of losing everything at any moment, or a protected 7% return after a ‘donation’ of 2% to cover your insurance in Opium Insurance and peace of mind?”, the project blog says.

Platform representatives invite readers to pause for a moment and consider what will happen to capital placed in Tether (USDT) if it loses its near-one peg to the U.S. dollar.

Opium Insurance uses Peer2Pool, built on the Opium protocol.

According to the diagram below, buyers select an insurance product, pay a premium into the pool, and receive a tokenized insurance position. They can subsequently sell this asset on the secondary market or use it to obtain a payout in the event of an insured event.

Data: Opium Protocol.

Opium Insurance is a non-custodial service, with insurance products sold by users willing to bear such risk. Payouts are guaranteed by collateral locked in smart contracts.

Sellers contribute capital to the insurance pool and receive a liquidity provider token. As a result, they earn income on their deposits, since the premiums paid by buyers are added to the pool.

The project’s creators announced the launch of a liquidity mining program for the native token OPIUM.

DappRadar analysts predicted that insurance would play an important role in the DeFi ecosystem.

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