Opium, UMA to Launch Decentralized Insurance for SpaceX Flights
Opium is to offer a DeFi derivatives contract allowing users to hedge against the risk of a failed SpaceX launch.
Crypto derivatives protocol Opium and decentralized finance (DeFi) platform UMA are working together to provide insurance products for SpaceX flights.
- The derivatives work as binary options contracts, allowing users to purchase insurance against a failed launch on SpaceX, the Elon Musk-founded space-transportation services company.
- SpaceX's SmallSat Rideshare flights allow multiple payloads to share launches into space, so bookers can send smaller, lighter payloads.
- The first launch of its kind took place Jan. 24, when a Falcon 9 rocket transported 143 satellites into space.
- Owners of these payloads and their stakeholders may wish to hedge the risk of a failed launch. Furthermore, the attention that a SpaceX flight draws may lead some enthusiasts to speculate on its success or otherwise and potentially profit from the outcome.
- Insurance is already offered by SpaceX at about 5% of the value of the payload. Opium and UMA are attempting to compete with that.
- "If the market price is less than 5%, we can show how strong DeFi is in making insurance cheaper," an Opium spokesperson told CoinDesk. "If the market sets the price at more than 5% we can invite Elon to stake money and earn free interest."
- SpaceX did not respond to CoinDesk's request for comment.
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