Crypto derivatives protocol Opium and decentralized finance (DeFi) platform UMA are working together to provide insurance products for SpaceX flights.

  • The partnership will see Opium plug into UMA's Optimistic Oracle product to provide financial derivatives for hedging risks related to 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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