According to insurAce, a Defi insurance protocol platform that covered against UST de-peg event, USDT worth $12 million will be paid out to UST holders with a valid policy.
This was confirmed by the Dan Thompson, the CMO of InsurAce, who confirmed to the media that “we’ll payout and recover fast.” Thomson Furthered by saying: “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.”
In a blogpost by InsurAce, the article explained what happened and how to make a claim provided you hold a valid policy. A claim can be made when “the Time–Weighted Average Price (TWAP) 10-day average drops below $0.88.”
This event happened around 5 am UTC, 13th May, 2022 of which has been acknowledged by insurAce. The process for making involves proving ownership of both valid policy and either UST or UST derivative tokens like aUST at the time of the de-peg.
The company also requires customers who bought a policy and did not have UST in their wallet at the moment of purchase to reach out to them provided they did not hold it at least ten days before the event occurred. While insurAce is not ensuring that it will pay out these clients, 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.”
Every eligible cover holder must send their claim requests through the email on their website by 20 May 2022, 23:59:59 UTC.
Some Protocols Are Not Paying Out Yet
Compared to other leading UST de-peg protocols insurers, insurAce is more favorable.
Unleashed Finance for instance, has its policy stated that UST must trade below TWAP of $0.87 for two weeks. Therefore, investors who have used that policy will have to wait a while to be able to make their claims.
A community in Unleashed Finance told the media that claims will still be eligible after two weeks if Terra blockchain is halted again, and thus trading stops.
Unleashed Finance on Twitter stated that they’re “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.”
Nexus Mutual is another Defi platform that offers protocol insurance “against a loss of funds, not a loss of value.” its Anchor insurance is not likely to payout as it does not offer UST de-peg insurance.
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. This is because the Defi platform does not offer UST de-peg insurance.
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