Cross-chain insurance marketplace with enhanced capital efficiency
Tidal Finance has introduced its version 2 (v2), representing a significant evolution from its initial version. The platform now supports any third-party insurer or underwriter to host their own insurance pool, a significant departure from v1. This change democratizes the platform, promoting a more decentralized model by offering external parties the chance to underwrite and manage their own risk pools, thus increasing the diversity and flexibility of insurance offerings.
Moreover, the customization capabilities of insurance policies have been greatly enhanced in Tidal v2. Customers now have the option to tailor their insurance policies according to their unique needs, including pricing and duration. This move towards personalized insurance policies signifies a significant improvement from v1, making the platform more user-centric and adaptive to the varying requirements of different users.
In addition, v2 introduces the separation of collateral among insurance pools. This feature enhances the risk management process for insurers and underwriters, making it easier to manage risk associated with their respective pools. The collateral separation provides an individualized risk containment mechanism, which greatly reduces the possibility of widespread impact due to any single pool's failure, and is a considerable upgrade in terms of security and risk management from v1. Overall, Tidal v2 represents a major step forward in enhancing the platform's versatility, customer-centricity, and risk management efficiency.
The protocol is an insurance marketplace that is decentralized. It enables insurers/underwriters to launch insurance policies on-chain, protecting policyholders from risk and providing profit potential for liquidity providers.
Protocol participants include:
- Pool manager - underwrite policy, modify policy parameters, and submit claim
- Liquidity provider - As a liquidity provider, you can deposit collateral and earn a yield.
- Policyholders - Purchase insurance policies and pay premiums.
- Committees - vote on a claim, and propose and vote on a manager or committee member change.
The graph below depicts the relationships between protocol participants:
Tidal Finance v2 is committed to expanding the boundaries of blockchain-based insurance beyond just crypto-related cases, aiming to onboard a more diverse array of coverage policies to drive the broader adoption of decentralized insurance solutions. Our ambition extends to encompassing real-world insurance cases, reflecting our belief that the advantages of blockchain technology are not limited to the digital domain, but can be transformative in traditional sectors as well.
Our mission with v2 also centers on optimizing the traditional insurance processes, aspiring to save on overhead costs through the implementation of various modules on our platform. These modules will streamline key processes such as claim management, payment flow, and underwriting, among others. By leveraging the unique capabilities of blockchain, we aim to provide a more efficient, transparent, and cost-effective alternative to conventional insurance processes. In essence, Tidal Finance v2 seeks to break down the barriers between the traditional insurance industry and the blockchain world, fostering an environment where the best of both realms can be utilized for the benefit of our users.