Etherisc, the open-source, decentralized insurance protocol and ecosystem, has today launched the first-of-its-kind USDC depeg protection cover to the public. As a peer-to-peer parametric product, customers receive automatic payouts should the price of the USDC stablecoin fall below its $1 USD pegged value by 0.5% for a period longer than 24 hours. The automated, blockchain-backed policy removes lengthy claims and assessment processes leading to exceptionally fast payouts and value assurance for covered USDC deposits.
Christoph Mussenbrock, Co-Founder at Etherisc, said: “The purpose behind stablecoins is to provide a predictable haven within the volatile world of cryptocurrency. However, as the crypto market impact resulting from the recent failures of Silicon Valley Bank, Signature Bank, and Silvergate Bank showed, this stability isn’t always guaranteed. We saw a clear gap in the market for stablecoin protection and the launch of depeg cover on Etherisc brings immediate peace of mind for customers and their USDC deposits.”
In the event of a depeg, Etherisc’s solution protects USDC deposits in non-custodial wallets with automated pre-specified payouts, verified through a time-tested Chainlink Data Feed. As soon as the USDC-to-USD Price Feed reports a USDC price below 0.995, the product enters a triggered state. If USDC does not recover to its peg within 24 hours, the product enters depegged state. As soon as the product enters a depegged state, customers can claim an USDT payout from their protected wallet at the click of a button. After a depeg event users have up to 7 days to claim.
The value of customer payouts is calculated by an Ethereum-based smart contract, taking into account the amount covered, the customer’s total USDC balance at the time of the depeg event and the USDC price at that time. Initially, a minimum of 2,000 USDC per wallet is covered, with plans to roll out increased cover and extend coverage to other stablecoins in the near future. The product underwent extensive and successful testing during the recent USDC live depeg event in March, 2023.
The launch of parametric USDC depeg protection marks a significant milestone in the roadmap of Etherisc’s self-sustaining, decentralized insurance platform. Etherisc will also enable first peer-to-peer risk pools where holders of USDT may ask for rewards on the staked capital through premiums paid by those availing of depeg protection. These risk pools are also used to cover the cost of payouts in the event of a depeg incident. These risk pools have to be backed by an amount of DIP tokens, provided by either the USDT staker or other DIP token holders. Stakers of DIP tokens may receive rewards as well.
Mussenbrock concluded: “Truly safe avenues within crypto are essential to furthering widespread adoption. Peer-to-peer depeg protection is an innovative way to protect investors’ stablecoin deposits and appeals to those who, above all else, are seeking peace of mind regarding their crypto assets. In addition to extending this product, we will soon enable investors to deposit capital to fund the depeg protection and receive rewards – all powered by staking Etherisc’s DIP token.
“The traditional insurance industry is long overdue (for a) radical overhaul, with blockchain capable of bringing entirely new levels of transparency and efficiency to the table. Etherisc is building the rails for a thriving, self-sustaining, decentralized insurance ecosystem and our USDC depeg protection is the first marquee product of this new era.”
Etherisc invites holders of USDT to stake their Tether. For more information, visit depeg.etherisc.com.