We can now announce that cover policies will be available for the Binance Exchange in our marketplace from Thursday 1st December. Binance is set to become the first project for which a dedicated cover pool is created.
The Binance Exchange cover will have its own dedicated cover pool and will provide users a means to mitigate the risk of loss of assets as a result of cybersecurity incidents. Binance Exchange is the first CeFi exchange for which parametric cover will become available in the Neptune Mutual marketplace.
Our CEO, Binod Nirvan, said,
We are glad to announce that the Binance exchange custody cover has been added to our platform. Binance, the biggest cryptocurrency exchange in the world, was selected as the first dedicated cover product in order to provide the Binance community an access to parametric cover policies. Neptune Mutual is the first decentralized cover protocol to offer a parametric cover policy for the Binance exchange.
In contrast to diversified covers, the Binance pool will be a dedicated cover. The Binance dedicated pool will offer guaranteed payouts, which will enhance the user experience. In addition to guaranteed payouts, the Binance community will also enjoy quick claims processing, eliminating the need to wait, submit a claim, and prove losses individually.
A message sent by CZ, CEO of Binance, that was shared on Twitter earlier in the month, commented on the need for Binance to lead the industry by example in terms of transparency, proof-of-reserves, and insurance funds. Binance Exchange created its own user insurance protection fund (Secure Asset Fund for Users or SAFU) back in 2018, and it was reported earlier this year to have exceeded $1B in valuation.
The Binance Exchange cover that can be found in our marketplace is completely independent from Binance. It is a complementary solution to the SAFU fund and it is a solution with a very different approach, not least of which is that user payouts are not determined by Binance in relation to individual loss (or other criteria they may use), but rather by the marketplace incident resolution process based on an evaluation of whether the policy parameters have been triggered or not.
Clicking on the Binance card will lead you to more detailed information about the project and its corresponding cover policy.
You can purchase a policy after having carefully reviewed the parameters and terms of the cover policy. If an incident occurs, and is validated by the incident resolution process, then all cover policy holders are eligible to receive a payout. No individual loss claims need to be assessed, making the process scalable, fast and reliable.
You can also provide liquidity to the dedicated cover pool. Currently, LPs generate yield resulting from the fees paid by cover policy holders. In addition, dedicated cover pools lend a small percentage of liquidity to low risk lending protocols, such as Aave and Compound, in order to improve the returns to LPs.
We have designed into the protocol a number of other means by which LPs can generate returns, including Proof of Deposit (POD) staking, and as well as other staking mechanisms; these are not currently available but we expect cover creators to launch these over the coming weeks and months. To help you understand the risks and returns of becoming an LP, and understand the difference between parametric and discretionary cover, we have written a comprehensive article on “Understanding Underwriting Capital”.
We recognise that sourcing liquidity for cover protocols is one of the biggest constraints to widespread adoption of cover in the blockchain industry, and so we have paid particular attention to LP needs in terms of transparency of risks and returns of the stablecoin pools and also exit strategies for LPs.
For those of you who have interacted with either of our testnet applications over the last couple of months, the process of navigating through the marketplace is the same.
We have published a number of in-depth explainer videos in its YouTube channel, and you can also visit the resource section for informative articles, updates, cover creator profiles, hack analyses, and more.
Moderators are available to answer questions and share information in our Discord and Twitter communities.
Founded in 2017, Binance is the largest centralized crypto exchange ranked by daily volume traded. The exchange facilitates spot, futures, and derivatives trading via its online platform and mobile app.
As a CeFi exchange, it operates order books and offers custodial services of digital assets to facilitate trading.
Binance also offers lending and borrowing services, as well as other features such as staking and NFT sales to its user base.
Neptune Mutual project safeguards the Ethereum community from cyber threats. The protocol uses parametric cover as opposed to discretionary insurance. It has an easy and reliable on-chain claim process. This means that when incidents are confirmed by our community, resolution is fast.
Join us in our mission to cover, protect, and secure on-chain digital assets.