InsurAce Announces $12 Million Insurance Payments to 155 Terra$UST Crash Victims – InsuranceNewsNet

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When the algorithmic stablecoin Terra$UST broke loose May 2022many feared that the crash would lead to a systemic crash of the entire cryptocurrency industry. Dan Thompsonthe marketing director of leading DeFi platform – InsurAce, shares how their prompt insurance payouts to over 155 victims who lost funds in the crash helped maintain investor confidence in DeFi at such a critical time .

On May 6, 2022, news broke on major crypto channels that the algorithmic stablecoin Terra-$UST had lost its peg, leading to widespread investor panic. And in a hectic 48 hours between May 12 to May 13, 2022the price of then $18 billion MarketCap algorithmic stablecoin Terra USD ($UST), which was supposed to maintain a $1 ankle, fell below 35 cents on May 9. Its sister token, $LUNA, which was supposed to stabilize the price of $UST, went from $80 to close to zero.

No thanks to this catastrophic collapse of the Terra ecosystem, thousands of investors scattered around the world lost $40 billion – therefore, the DeFi world threatened to collapse, until Stablecoin De-ankle covers came to the rescue.

What is Stablecoin Insurance?

Stablecoins are special digital assets that play the traditional role of money in the blockchain world. These are cryptocurrencies whose value is tied to a specific fiat currency or, in some cases, a basket of currencies.

When designing stablecoins, issuers must navigate the trilemma of decentralization, security, and stability to find the optimal reserve mechanism to back up their tokens. Asset-backed stablecoins are more stable, they are often largely centralized. And that means users can be exposed to vulnerabilities from a single point of failure as well as censorship and restrictions from regulators.

And while algorithmic and crypto stablecoins are more secure and decentralized, even when oversized they run a major risk of unpecking in adverse market conditions.

To mitigate these risks, DeFi protocols have created Stablecoin De-peg hedges to protect Stablecoin users and investors against certain de-peg events.

InsurAce was one of the DeFi protocols that provided the most impactful responses to the recent high-level stablecoin detachment that occurred on the Terra ecosystem.

During a recent interview, the CMO of InsurAce Dan Thompson revealed how the timely intervention of the DeFi protocol helped save the day.

“The main reason our response was effective was because it was quick and efficient,” Thomson said.

“On May 13, just 48 hours after the $UST de-peg event, we issued a press statement to initiate the loss claims process for $UST investors. We have published a user guide that clarifies coverage specifications and claims eligibility. With a 7-day claims window, we have set ourselves the goal of providing instant support to victims and sending a reassuring statement to the rest of the DeFi world. he added.

How InsurAce reacted to the $UST crash

With a streamlined claims process, InsurAce has been hailed worldwide for providing a quick response to $UST investors who hedged their $UST stablecoins with InsurAce. InsurAce’s quick response helped restore investor confidence in DeFi as users quickly recovered amid a terrible market-wide fallout.


Total covers sold: 234

Total amount of coverage: $22,158820

Total complaints: 173

Total claim amount (USD): $12,474,477.84

Total number of claims rejected: 18

Total value deducted from moon drop (USD): $177,692

Total claim amount after deductions (USD): $11,730,758.24

InsurAce — Summary of payouts in USD De-peg

More importantly, an in-depth look at chain claims data showed that InsurAce had taken a hit in the process. According to an updated report published by the protocol Advisory Boardthe protocol estimated ~$11.7 million in $UST detachment claims. Having collected only $94,000 in premium payment, such a high margin rate of successful claims payments showed that the platform had outstanding risk management strategies in place before De-peg risks crystallized.

Asked about the decision-making process for payouts, Thomson explained that InsurAce has deployed a community-driven approach, with its independent native governance token holders ($INSUR.) running the claims assessment process.

“The decentralized voting was conducted by InsurAce’s claims adjuster community who hold and stake $INSUR tokens. And at the end of the voting process, they approved a total of 155 requests for deletion coverage US dollar anchor and 18 rejected as ineligible under Stablecoin anchor removal coverage terms and conditions Thomson continued.

Compensation for the Ecosystem Investors and stakers

When asked how InsurAce plans to compensate its underwriters for their role in the $UST De peg event, Thompson responded by saying that InsurAce has since unveiled a responder compensation plan to help reduce losses from pegs. protocol subscribers who have had their assets used in connection with UST$ payments.

“As well as improving our risk management strategies, we have plans in place to mitigate losses incurred by stakers. Over the next 12 months, a fixed sum will be paid into an on-chain pool from which stakers will be able to withdraw their compensation.The laddered approach will help us ensure that we can help stakers recoup some of their losses, while maintaining healthy liquidity in the InsurAce protocol, Thomson concluded.

The crash of $UST remains one of the biggest tests for DeFi as a whole, mitigated in part by the safety nets of protocols and underwriters working hard to defend the space. With the presence and relentless efforts of protocols such as InsurAce to protect users in the space, DeFi is rapidly evolving into an increasingly secure, robust and sustainable global alternative to traditional finance, an alternative where individuals have a greater control and autonomy over their finances.

About AssurAce is a leading decentralized multi-chain protocol that provides reliable, robust and secure risk protection services to DeFi users, allowing them to protect their investment funds against various risks.

With, users can count on:

Since its beginnings in April 2021, has built a full-spectrum cross-chain product line that covers over 140 protocols, 3 CEX platforms and 1 IoT running on Ethereum, as well as Solana, BNB Smart Chain, Polygon, Fantom, Gnosis, Arbitrum , Avalanche, Harmony, Celo, Cronos, Boba, ICON, Ontology, Moonriver, Moonbeam, Bifrost, Aurora and Optimism. currently has a live product deployed on Ethereum, BNB Smart Chain (BSC), Polygon, and Avalanche.

InsurAce is led by founders Olivier XieSum Wu and Dan Thompson (@vagrantcrypto) with a globally distributed team of insurance and web3 experts.

Connections: is a leading decentralized multi-chain protocol that provides reliable, robust and secure risk protection services to DeFi users, allowing them to protect their investment funds against various risks.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.

Contact Details

Dan ThompsonCMO

[email protected]

Company Website

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