Risks of Insurance Staking

Understanding the risks before adding liquidity to the Insurance Protocol is a must

When a user stakes his assets (provides liquidity) in one of our Insurance Pools, he trades risks with assured returns. Rewards are not guaranteed as they are always subjected to Insurance Protocol changes or they can be affected by external factors.

The following factors can affect staking and rewarding:

• Cyberattacks

• Claims

• Locking period

• Liquidity and Volatility

Cyberattacks

An event of a cyber attack can cause losses or total drainage of the insurance staking pools.

NOTE: The assets staked in Insurance Protocol Pools are not entitled to any coverage.

Claims

When a user deposits assets in one of the Insurance Protocol Pools, he's exposed to indemnity payment risks.

In case of an accepted claim, we will use the assets from the Insurance Protocol Pools to compensate insurance policyholders.

NOTE: We decide an equitable compensation method and we impose it on each Insurance Protocol staking users according to their shares.

Lock-up Period

When a user stakes assets (provides liquidity) in one of our Insurance Protocol Pools, the liquidity is automatically placed in a locked state for a period of 15 days. (This period may be subjected to change) Unlocking of staked tokens will be possible at any time after the locking period has passed.

Unstaking and withdrawing the assets is possible as soon as the locking period expires.

NOTE: If there were compensations caused by successful insurance claims during the period when a user had the assets staked in one of the Insurance Protocol Pools, the user will withdraw fewer assets that he initially staked.

Liquidity and Volatility

The price of staked assets in Insurance Protocol Pools can be volatile and there's always the risk of total liquidity depreciation, resulting in financial loss. NOTE: We are not responsible and we don't cover price depreciation of staked assets in Insurance Protocol Pools.