Stablecoin Depeg Insurance

How Stablecoin Depeg Insurance Works

Innovative protection for your digital assets

Select Your Stablecoins

Choose which stablecoins you want to protect and specify the amount you wish to insure.

Set Protection Parameters

Define your protection thresholds - at what price deviation should the insurance trigger.

Pay Premium & Activate

Pay the calculated premium to activate your protection smart contract on the blockchain.

Automatic Payout

If a depeg event occurs meeting your defined parameters, compensation is sent automatically to your wallet.

Why Choose Our Depeg Insurance

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Instant Protection

Coverage activates immediately after premium payment. No waiting periods or activation delays.

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Customizable Triggers

Set your own depeg thresholds and coverage amounts according to your risk tolerance and portfolio.

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Transparent Pricing

Premiums are calculated based on historical volatility, amount insured, and selected parameters - all visible before purchase.

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Automated Payouts

Smart contracts execute automatically when price oracles confirm a depeg event matching your parameters.

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Secure & Decentralized

Funds are held in secure smart contracts until either policy expiration or triggered payout. No custodial risk.

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Flexible Coverage Periods

Choose coverage duration from 7 days to 12 months to align with your investment timeline and strategy.

Get Your Stablecoin Depeg Insurance Quote

Protect your digital assets in minutes. Enter your details for an instant, customized quote.

"When UST depegged, I lost thousands. Now with this insurance on my USDC holdings, I can sleep better knowing I'm protected against similar events."

— Alex K., Crypto Investor

Stablecoin

Coverage Amount (USD)

Depeg Threshold

Coverage Period

Wallet Address

Email (Optional)

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Understanding Stablecoin Depeg Insurance

What is a Stablecoin Depeg Event?

Stablecoins are cryptocurrencies designed to maintain a stable value, typically pegged to a fiat currency like the US dollar at a 1:1 ratio. A "depeg event" occurs when a stablecoin significantly deviates from its intended peg value.

For example, if a USD-pegged stablecoin that should be worth $1.00 falls to $0.90 or below, this would be considered a depeg event. Such events can be caused by various factors including market volatility, liquidity crises, or issues with the stablecoin's backing mechanisms.

How Depeg Insurance Protects You

Stablecoin depeg insurance serves as a financial safety net against the risk of your stablecoins losing their peg value. When you purchase coverage, you're essentially hedging against the risk of significant value loss in your stablecoin holdings.

Our blockchain-based insurance solution uses price oracles to continuously monitor stablecoin values across multiple exchanges. If the price falls below your selected threshold for a sustained period (typically 1 hour to prevent temporary flash crash triggers), the smart contract automatically executes, sending compensation to your wallet.

Historical Context: Why This Matters

The collapse of TerraUSD (UST) in May 2022 serves as a stark reminder of depeg risks. What was once a top-5 stablecoin rapidly lost its $1 peg and eventually collapsed to near-zero, wiping out billions in investor value in just days.

Even well-established stablecoins have experienced temporary depegs during market stress. For example, USDC briefly traded below $0.90 in March 2023 following the Silicon Valley Bank collapse, while DAI and other stablecoins have seen temporary deviations during extreme market conditions.

How Our Protection Works

Our protection is implemented through a smart contract that holds the potential payout funds in escrow. The contract connects to decentralized oracles that aggregate price data from multiple reliable sources to determine the true market price of the stablecoin.

Premium pricing is determined algorithmically based on several factors including:

The stablecoin's historical stability
Current market conditions
Your selected depeg threshold
Coverage amount and duration

Lower thresholds (e.g., triggering at $0.95 vs $0.80) result in higher premiums as they're more likely to be triggered.

Frequently Asked Questions

How is a depeg event officially confirmed?

A depeg event is confirmed when our oracle network reports that the time-weighted average price (TWAP) of the insured stablecoin falls below your selected threshold across multiple major exchanges for at least 60 consecutive minutes. This methodology prevents triggering on momentary price spikes or isolated exchange anomalies.

Do I need to hold the stablecoins I'm insuring?

No, you don't need to prove ownership of the stablecoins you're insuring. Our product functions more like a derivative product than traditional insurance. This means you can use it as a pure hedge even without holding the underlying asset.

How much of my stablecoin value is covered?

Our standard policies cover 100% of the insured amount in the event of a qualifying depeg. For example, if you insure $10,000 of USDC and a depeg event occurs, you'll receive $10,000 worth of compensation in your selected payout currency, regardless of the actual post-depeg value of USDC.

What happens after a payout occurs?

Once a payout is triggered, the compensation amount is transferred to your wallet and the policy contract is closed. If you wish to maintain protection, you'll need to purchase a new policy. Note that premiums may be significantly higher immediately following a depeg event due to increased market risk.

Can I cancel my policy and get a refund?

Due to the nature of the risk being covered, depeg insurance policies are non-refundable once activated. The premium is locked in the smart contract along with the potential payout amount for the duration of your coverage period.

Is there a maximum coverage limit?

Yes, our standard platform limits maximum coverage to $1 million per stablecoin per wallet. For institutional investors or those seeking larger coverage amounts, please contact us directly for customized solutions.

In what currency are payouts made?

By default, payouts are made in ETH or the native chain token where your policy is deployed. You can also select alternative stablecoins for payout (except the one being insured). For large policies, we recommend selecting a different stablecoin for payout to diversify risk.

How are premiums calculated?

Premiums are calculated using a proprietary algorithm that considers multiple risk factors including historical volatility of the stablecoin, market liquidity, backing mechanisms, regulatory environment, coverage amount, depeg threshold, and duration. Higher risk stablecoins, lower trigger thresholds, and longer durations result in higher premiums.