Audience: Protocols and retail by extension, Funds with large stakes in protocols. Tidal Finance aims to play the role of a leading facilitator of discretionary mutual cover for DeFi protocols to protect their retail consumers and support sustainable longevity in protocol growth through trusted risk mitigation. Funds are available to support a certain, pre-determined claim amount for TVL in the event of a smart contract hack, which will be paid out once the governing body approves such a claim. Cover is sold to the protocol B2B, with a dashboard available to the protocol team and tidal tech support for backend integration for the protocol’s D2C cover purchase.
Benefit: Under a hack, protocols can quickly recover the loss. The payout to cover buyers normally takes less than 2 weeks to process.
Risk: Since the USDC reserve is shared across multiple protocols, in the event of multiple pools being hacked in a short time window (i.e. one week) - the governing body has the discretion to determine the priority of payouts (usually in the order of hack events up to all claimable available reserves).
Cover Amount Adjustment: Cover amount can be adjusted weekly with a weekly payment schedule. The maximum coverage amount is capped at the reserve level to ensure the payout amount. Any over purchased amount cost will be automatically returned to the buyer's wallet.