InsurAce, a DeFi insurance platform that offered cover against a UST de-peg event, has confirmed that they will be paying out $12 million in USDT to users who hold a valid policy. The CMO of InsurAce, Dan Thomson, confirmed to us directly that “we’ll payout and recover fast.” Thomson went on to say,
“This shows the importance of insurance in the industry and in any smart investor’s strategy.
Crypto is never risk free but there are ways to reduce risk. This is why we founded InsurAce, to make crypto safer for everyone.”
InsurAce explains what happened and how to make a claim if you hold a valid policy in a blog post. A claim can be made when “the Time
–Weighted Average Price (TWAP) 10-day average drops below $0.88.”
This event occurred at 5:00 am UTC on 13th May 2022 and has been acknowledged by InsurAce. The process for making involves proving ownership of both a valid policy and either UST or UST derivative tokens such as aUST at the time of the de-peg.
InsurAce also asks customers who bought a policy and did not have UST in their wallet at the moment of purchase to contact them if they did hold it at least ten days before the de-peg event. While it is not guaranteeing it will pay out to these customers, it states,
“whilst not explicitly covered by the policy, we aim to keep open communication with this issue, particularly due to the complex nature of the event.”
All eligible cover holders must submit their claim request by May 20th, 2022, 23:59:59 UTC via the email found on their website.
Protocols that aren’t paying out (yet)
This compares extremely favorably to the other leading UST de-peg insurer, Unleashed Finance, which is not yet paying out. This is because their policy states that UST must trade below TWAP of $0.87 for two weeks.
Investors who have taken that policy will have to wait a while to be able to start their claim process. A community moderator from Unslashed Finance has informed us that claims will still be eligible after two weeks if the Terra blockchain is halted again, and thus trading stops.
On Twitter, Unleashed Finance state that they are “likely” to pay out in the next two weeks but urges users; “do not sell your UST as the conditions of the claim are not yet fulfilled.”
Another DeFi platform, Nexus Mutual, offers protocol insurance “against a loss of funds, not a loss of value.” Therefore, its Anchor insurance is unlikely to payout. It does not offer UST de-peg insurance.
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Author: Liam ‘Akiba’ Wright