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DeFi project Opium Protocol launches sidechain asset insurance service

DeFi-based cryptocurrency derivatives platform Opium Protocol has unveiled its Bridge Protection solution designed to hedge risks when interacting with sidechains.

Tokenized and decentralized insurance solution based on the Opium CDS contract [credit default swap, кредитный дефолтный своп]… Insurance can be purchased or sold as a token through the Opium Staking service.

The Opium Protocol noted that the reliability of the sidechain determines the security of the bridge that connects it to the main network. The so-called bridge contract is responsible for the storage of the assets sent to the “side chain” [bridge contract] on the mainnet.

According to the diagram below, users who are confident in the reliability of a particular bridge place funds in a staking pool to earn commissions. In contrast, network members wishing to hedge their risks pay for monthly insurance coverage.

Data: Opium Protocol.

When a user contributes assets to a pool, he assumes the risks associated with the selected sidechain. You can withdraw funds once a month – on the day of the pool rebalancing. Resell a position in the secondary market – at any time.

The buyer of the insurance will receive a payment in the event of a failure or breach of the bridge contract. A staking participant in such a situation will lose his assets.

As a reminder, in December 2020, the platform launched the Opium Insurance risk hedging service for the DeFi sector.

In January 2021, the platform released the OPIUM management token as part of its proprietary drOpium liquidity mining model.

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Fidenge Pecold

My profession is a journalist, but my hobby for 8 years has been studying Forex investing and trading. During this time, I managed to gain extensive experience in investing and trading cryptocurrencies and double my capital in the Forex market. To be the author of this magazine, the site owners invited me to participate in one of the 2020 trading webinars, and I will try to reveal the most relevant crypto market news for you.

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