Tidal Finance is a project to establish a decentralized insurance marketplace in DeFi space to connect insurance sellers and buyers to cover smart contract hacks risk. Tidal offers the functionality to create custom insurance pools for one or more protocols. The main objective of the platform is to maximize capital efficiency and return to attract LP’s, while offering competitive insurance premiums to attract buyers.
Tidal token holders can propose new coverage pools. Each pool will combine protocols LPs will be able to stake capital to provide coverage. Users can purchase insurance by choosing an asset and setting the number of weeks and amount of coverage desired; in response, the system will automatically generate a token that represents the coverage based on the current coverage price quote.
Tidal takes into account various risk factors of each protocol which include staked capital, daily volume, how long it’s been deployed without an incident, etc. Base Premium is then calculated. The Actual Premium is calculated in real-time using the Base Premium and curved based on the coverage utilization rate.
As DeFi becomes mainstream, individuals and institutions need assurances that their investment of value into these new protocols are protected. As any new technology, smart contracts are susceptible to hacks and manipulations. In order to increase adoption of DeFi instruments, confidence in these protocols must be increased. Tidal solves this problem in a way that is economically attractive to users of DeFi protocols, transparent, profitable for LPs, decentralized, and scalable.
The Tidal protocol is governed by its governance token holders. The public can submit changes to our code or parameters that guide performance of the protocol. Token holders can vote on these proposals in our normal DAO process using TIL tokens. At launch, all of the required parameters and selection of Assessors, etc. will be set by the Tidal team; however, all of this can be changed via the governing process.
It is in the best interest of Tidal token holders to support the value of the Tidal tokens. The value of these tokens in turn is directly related to the overall health of the Tidal protocol. Our claim voting process will reward token holders that vote in the majority. Tidal Assessors can also overwire the vote unless the super majority has voted in favor of denying the claims.
No, Tidal is non-custodial and doesn’t require KYC.
Tidal protocol is designed to help LPs to generate attractive returns while lowering the risk to their capital. Tidal functionality allows LPs to stake their capital to cover multiple protocols. At the same time, our Guarantors capital has first priority to be used to cover any approved claims.
Additional incentives to the LPs are provided in the form of TIL tokens.
No, you have full control over the capital staked to the protocol at any point of time. Nobody on the Tidal team has the ability to control your funds. There is a delay before you can withdraw your funds, to make sure any claim filed for the pool you are providing capital to can be covered.