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 reserve providers, while offering competitive insurance premiums to attract buyers.
How does Tidal work?
User can participate on tidal platform in the form of 4 roles:
Reserve provider: Provide USDC as insurance collateral to earn premium.
Cover buyer: Pay premium fee to get their TVL covered.
Guarantor: Token holders of the protocols in the mutual cover pool can stake their token as collecteral to earn premium.
TIDAL staker: Stake TIDAL token as collecteral to earn premium.
Why was Tidal built?
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, decentralized, and scalable.
How is Tidal governed?
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 TIDAL 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.
What is stopping voters from fraudulently denying a valid claim?
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.
Does Tidal require KYC?
No, Tidal is non-custodial and doesn’t require KYC.
Why should reserve provider provides coverage?
Tidal protocol is designed to help reserve providers to generate attractive returns while lowering the risk to their capital. Tidal functionality allows reserve providers to stake their capital to cover multiple protocols. At the same time, guarantor pool and staking pool is designed to compensate reserve providers when the loss insures.
Additional incentives to the reserve providers are provided in the form of TIDAL tokens.
Does Tidal or anyone else control my funds?
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.