DeFi Insurance Protocol Solace Goes Live

Insurance claims will be automatically validated, and payouts will be made in a single transaction.

Oct 19, 2021 at 5:00 p.m. UTC
Updated Oct 19, 2021 at 6:00 p.m. UTC

Decentralized finance (DeFi) insurance protocol Solace, which provides coverage policies for Aave, Compound and Uniswap among others, has gone live after eight months of development and four months on the Ethereum Rinkeby and Kovan testnets.

The protocol provides compensation for losses by managing risk using assessment based on analytics instead of voting or staking. The protocol is intended to help liquidity providers hedge their risk when there is potential of smart contract exploits.

“As a user, I don’t trust the current mechanisms like voting, staking or market forces, in other words ‘wisdom of the crowd,’ to accurately evaluate risk exposures and predict losses,” said Solace founder Nikita Buzov.

Solace said insurance claims will be automatically validated and requested within the network, and payouts will be made in a single transaction. The protocol describes itself as “censorship-resistant” and does not feature a know-your-customer (KYC) method.

Solace has received financial grants from Polygon, NEAR and Aave.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Tanzeel Akhtar is a CoinDesk news reporter based in Europe.