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Starting from the aggregation of borrowing and lending, YFI started the expansion of its DeFi "empire". In addition to providing stable currency aggregation and mining aggregation, YFI began to focus on DeFi insurance. DeFi insurance is an indispensable area for the development of DeFi. YFI’s Insurance According to the founder of YFI Andre Cronje, YFI’s insurance consists of three core parts: 1. Underwriters’ Funds, 2. Insured’s Funds, 3. Claims Governance
Insurer
To become an insurer is very simple, no KYC or other is required, just deposit specific funds in the "Insurer's Bank". The first insurer's fund library is the yiUSDC library, and users deposit USDC and get yiUSDC. Anyone who deposits USDC in the treasury can become an insurer. What are the benefits of being an insurer?
You can earn insurance start-up costs and weekly expenses paid by the insured. Of course, the insurer obtains the income, but also has to bear the obligation: if the claim is approved, USDC will deduct it from the fund library and pay it to the claimant. In other words, yiUSDC represents not only the income of the insurer, but also the obligation of the insurer.
Insured
Similarly, there is no need for KYC, and the insured deposits the insured funds into the "Insured's Treasury" to become an insured and obtain insurance services.
For example, if the user wants to insure his CRV assets, then the user deposits it in the insured's fund library, and generates yiCRV after depositing it. When depositing into the "Insured's Funds", a 0.1% start-up fee is required, and at the same time, 0.01% of the fee will be deducted every week.
The insured can withdraw CRV at any time, or deposit more CRV. The amount of user insurance is the amount of CRV deposited. This kind of insurance service has no fixed period and has greater flexibility.
Claim
If a claim event occurs, a claim governance is required. In the above example, the insured filed a claim by pledge of yiCRV. Insurers use their yiUSDC to vote. During the three-day voting period, 33% approved it and 25% rejected it.
Assuming that the claim is approved, yiCRV will be allocated to the insurer of yiUSDC, and USDC will be paid to the insured. The design of this mechanism is relatively flexible.
It can insure various assets, which can be basic assets (DAI) or compound assets (yDAI) per month. Insurers can get insurance start-up costs and weekly costs, and they are also responsible for claims management. If the insurer refuses to make a valid claim, the insured will move its funds out. This means that the insurer is not profitable.
The first insurer's fund bank is USDC, and the first insured's fund bank is yUSD (packaged yCRV) from yVault. YFI's insurance is an active exploration in the DeFi field. Currently, Nexus Mutual insurance requires KYC. In encryption insurance, there are certain thresholds. With YFI's DeFi insurance, KYC is not required, and the insurance relationship between the insurer and the insured can be realized by pledge of assets. Of course, the specific details of the claims governance here have not yet been released, and the game has not been practiced at present, and the specific effects are unknown.
However, YFI's insurance represents the development direction of insurance in the DeFi field. In the future, new insurance mechanisms will surely emerge. For now, YFI insurance exploration is one of the most active explorations in the DeFi field. The possibility of YFI Blue Fox Note also paid attention to YFI's "YFI: BTC in DeFi?" ", "YFI Iteration", "YFI: Possibility of Aggregator". The possibility of YFI lies in the possibility of its founder and community. The founder and the community have been moving forward, iterating step by step according to the development needs of DeFi. This iteration itself has various possibilities. It is like a razor, shaving all unreasonable things and constructing something that may be more convenient. This may be one of the important driving forces in the history of DeFi.
In addition to stable currency loan aggregation, mining aggregation, and DeFi insurance, YFI may also involve liquidation, leverage, transaction aggregation, etc. in the future. If it can continue to iterate steadily (and withstand various risk crit attacks), YFI will eventually capture the large-scale value of the DeFi field and become one of the most important projects in the DeFi field. ------Risk warning: All articles of Blue Fox Notes cannot be used as investment advice or recommendation. Investment is risky. Investment should consider personal risk tolerance. It is recommended to conduct an in-depth inspection of the project and make your own investment decisions carefully.
