VIP-9: Proposal to integrate Oddin insurance in Voltage

Proposals
1

Summary
DeFi is risky, and it’s time for Fuse users to have peace of mind knowing that their funds are secured and insured. Oddin offers a cover for smart contract hacks. Any Voltage users will have the option to purchase a cover against hacks for all or part of the funds locked in the protocol. You can read more about Oddin here: https://oddin.ai

Motivation
Giving the Voltage ecosystem the option to buy insurance against hacks is extremely important for the future growth of the ecosystem. Oddin’s security layer will make the whole fuse ecosystem a much safer place for everyone and allow the insurance layer to offer much lower cover costs. Oddin integration will move the Fuse Network one step closer to mainstream adoption.

The Insurance pool is used to hold the funds to compensate users in case of a hack in the Voltage ecosystem. All the assets in the Insurance pool receive APY that is paid from two sources, the insurance premiums and investments in tokens such as ETH.

Investments in ETH will be made only with funds not actively covering anything. Assets that do actively cover will be held in FUSD only, to make sure that if ablack swan event happens, Oddin is able to pay 100% of the claims.

To sum up what the Voltage ecosystem gets:

A security solution against malicious actors

An insurance offering to the ecosystem

APY on the funds in the insurance pool

Put a cap on the amount of refund the DAO needs to pay in case of a hack

Proposal
Voltage will create the initial insurance pool of $100K that will be locked and used in case of a hack to compensate all the victims that were insured by it. Then anyone from the community can add fuds to this pool and earn the insurance fees. That way enables more trust in the network.

Oddin insurance offers by far the lowest rates among all the insurers. This is possible only because the Oddin security platform is monitoring all the activity on the network.

Proposed Insurance rates:

DEX LP deposits insurance: 2%

Lending deposits insurance: 2% - 3.5%

Staking insurance: 2%

Polling Period
The polling process begins now and will end at 2:00PM UTC on 06/09/2022. After this, a Snapshot vote will be put up at 3:00PM UTC on 07/09/2022.

Poll
For: For integrating the Oddin insurance we ask the community to approve both points:

  • For the proposal (Integrate Oddin security with all protocols to allow blocking of malicious actors, approve Insurance pool of 100K$ for coverage, out of the Voltage treasury, 50K$ grant for operating Oddin security for 2 years)
  • Against the proposal.

0 voters

1 Like
2

I like this idea, but have some questions. :thinking:

  • Does this slow down current transaction speed?
  • Are current protocols going to be running through another layer of contracts?
  • If a community member decides to add to the insurance pool, can hey withdraw at any time?
  • If there is a hack and the insurance funds are used, community contributed funds to the pool are used to pay back the insured?
  • If all funds from the insurance pool are paid out, do the insurance fees paid out stop?
1 Like
3

Will you pay the 100k in stables or in Volt tokens?

4

Hi @SupportiveWolf,
First of all thanks.

  1. This integration is not affecting transaction speed.
  2. The current protocols will query oddin oracle for credit scores.
  3. At the moment community can’t add funds, it will be possible on a later stage,
    and the withdrawal policy will be published as well.
  4. Exactly.
  5. Yes, the fees are generated from cover premiums and investments
    so if the insurance pool is empty then no fees and no investments.
1 Like
5

Hi @Pauli,

oddin covers dollar amount, the premiums and the cover payments will be paid in stables.

1 Like
6

Thanks for the reply,
i have some more questions.

  • Exactly what does the $50k grant get the Voltage Project?
  • For the 2 years, Oddin will monitor for hacks and exploits in similar contracts?
  • After the 2 years what happens to this arrangement?
  • Will Voltage also be earning insurance fees on their $100k provided?
  • Are there similar projects out there that we can compare to Oddin?
    Thank-you for your time, :wink:
7

Hi @SupportiveWolf,

  1. The $50K is for servers storing all the indexed data and running ML.
  2. Yes, monitoring all the activity on the fuse network.
  3. The plan is that in 2 years, the premiums from selling insurance will cover all the expenses of monitoring the network. The premiums will be divided between oddin and the investors.
  4. Yes, Voltage is an investor in the insurance protocol.
  5. There’re several insurance protocols, we offer a different approach to cover all DeFi activity.
2 Likes