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TL;DR
Current crypto insurance & risk management solutions offer a one-size-fits-all approach that is ill-suited to the unique needs of individual DeFi users.
Cordyceps solves this by offering a range of features allowing users to create highly personalized insurance and risk management strategies.
Cordyceps’ users will be able to define their own risk events, allowing them to manage the specific risks that are relevant to their DeFi strategies.
They will also be able to create custom oracles, whilst also participating in an innovative secondary market for vault tokens.
Together, these features will combine to deliver the world’s first truly personalized crypto insurance & risk management solution.
Introducing The World’s First Personalized Crypto Insurance & Risk Management Solution
As discussed in our article introducing the protocol, Cordyceps is a next-generation DeFi risk management platform. It provides insurance for pegged assets like stablecoins and LSTs, and a speculation market for related events. But there is a lot more to the protocol than just that. In today’s article we’ll be explaining the 7 features that make Cordyceps’ insurance solution unique in the DeFi market and how these features will revolutionize the world of crypto risk management.
Let’s start by looking at the feature that most differentiates Cordyceps from other crypto insurance offerings, namely the ability to create their own insurance events and get personalized coverage for those events:
1. Empowering Users To Create Their Own Insurance Events
The current generation of crypto insurance offerings only allow users to insure themselves against a limited range of pre-defined events. Protocols like Y2K offer insurance against depegging events, whilst protocols like Nexus Mutual offer broader coverage for events such as failures in individual protocols or ETH validators. What unites all these platforms is that the risk events in question are all defined by the protocol itself. Whilst there is a place in the market for such solutions, it is not possible for them to answer to all the unique ways in which different DeFi users may wish to de-risk their activities. The DeFi market is defined by extremely complex and individual strategies that are unique to each user. So, the type of risk that one user wants to insure against will often be very different to the type of risk that another user wishes to mitigate. Therefore, a one-size-fits-all approach does not offer a good product-market fit for the highly personalized world of crypto. This is the key challenge that Cordyceps provides a solution to.
Rather than selecting from a range of predefined events, Cordyceps users will be able to create and define their own risk events. This means that they can manage the specific risks that are relevant to their own DeFi strategies with the level of specificity required by a sophisticated DeFi stakeholder. It also fosters an inclusive approach where the structure of the insurance products is always driven by the users of the protocols themselves rather than the protocol developers. This captures the decentralized spirit of DeFi, whilst also crowdsourcing the wisdom of the collective to constantly generate new types of risk events that may be relevant to other users. Most importantly though, it means users are managing the specific risks that are important to them rather than having to compromise to the nearest available predefined product offering. This is why Cordyceps represents a revolution in the crypto insurance market. Why use a generalized insurance product when Cordyceps allows you to design a risk management strategy specific to your unique strategies and goals?
But creating custom insurance events is not the only area where Cordyceps innovating on personalizing the risk management experience for its users…
2. Allowing Users To Create Custom Oracles
Most existing crypto insurance offerings are further delimited by a reliance on Chainlink oracles, which again narrow the degree to which users can tailor their risk management strategy.
As a protocol built around the understanding that effective crypto risk management involves a high degree of personalization, Cordyceps provides a solution to this. By implementing a flexible structure that invites users to create their own custom oracles, Cordyceps enables integration with a much wider range of events. Of course, the range of possibilities of these oracles will be limited to specific, simple use cases relevant to risk events on the platform, so are not designed to compete with Chainlink more generally. But they will provide just enough flexibility to provide the technical infrastructure Cordyceps requires to offer insurance and risk management that meet the highly personalized needs of crypto users.
3. Designing Vault Tokens Around An Innovative Range Of Underlying Assets
In-keeping with Cordyceps’ broader strategy of maximizing flexibility for users, it will be using ERC1155 tokens for as the underlying assets for its vault receipts. ERC-1155 tokens offer the capability to manage an infinite number of tokens within a single, smart contract, providing the kind of flexibility and scalability that sits at the heart of the Cordyceps philosophy.
There will also be an opportunity to trade these vault tokens on a secondary market within the Cordyceps platform…
4. Establishing A Secondary market For Cordyceps Vault Tokens To Promote Liquidity & Tradeability
It is important that there is a mechanism for ensuring that the vault tokens have robust value. Because these tokens would not be available to exchange on third-party DEXs etc., Cordyceps will build its own secondary market where users can buy and sell their vault tokens using ETH. Not only will this bolster the value of the tokens themselves, it will also encourage yet more user participation, creating an insurance protocol with a variety and depth of user engagement opportunities like no other.
5. Option To Make Deposits Using Tokens From The Root Ecosystem
To create further options for personalization and flexibility, Cordyceps will allow users to make deposits using CDP tokens as well as tokens from the Root ecosystem. And this won’t be the only way that Cordyceps benefits from being part of the Root ecosystem…
6. Integrating Into A Unified DeFi Operating System That Will Help Cordyceps Scale Its user Base, Technical Infrastructure, And Partnerships
Cordyceps is one of the first protocols created by Root. Root is developing a comprehensive operating system for DeFi, using its unique Root & Stem incubation model. Under this model, Root’s internal DeFi Lab Bloomworks incubates Stem protocols that focus on key DeFi market inefficiencies. It then integrates them into its Sprout operating system, which is designed to be a one-stop-shop for DeFi. As one of the first Stem protocols in the Root ecosystem, Cordyceps benefits from a range of network effects. Firstly, as it is integrated into Sprout, Cordyceps will get exposure to the entire combined user base of all the apps in the Root ecosystem, thereby providing a pipeline of new users to onboard. Additionally, there are a range of exciting technical collaboration opportunities that are emerging between Cordyceps and other Stem protocols, helping them to become more than the sum of their parts.
For example, here is how Cordyceps will be capitalizing on its relationship with Torus, which is one of the other Stem protocols being developed by Root…
7. Forging A Partnership With Torus To Offer Additional Yield Strategies That Efficiently Utilize Idle Funds On Cordyceps
One of the other protocols in the Root ecosystem that Cordyceps will be developing a close partnership with from the beginning is Torus. Torus is revolutionizing liquidity distribution and yield across multiple prominent automated market makers (AMMs) including Balancer, Curve, and many more. By driving liquidity wars, mitigating centralization, and embracing the LSDfi narrative, Torus empowers users to actively shape the future of DeFi.
Cordyceps will offer a seamless connection with Torus to deliver additional yield strategies that create value out of idle assets on the Cordyceps platform.
During the course of an insurance event, the ETH that has been placed into the risk and hedge vaults remains dormant, meaning it is not generating any returns. However, Cordyceps’ connection with Torus provides a solution to this challenge. Users will be able to direct their dormant ETH towards Torus, where they can then take advantage of the many yield strategies that Torus offers its users. Torus’ yield generation mechanisms span multiple tokens including CRV, CVX, and Torus tokens, in keeping with Cordyceps unifying vision of providing flexibility and personalization for users. This connection means that no asset will ever remain dormant or unproductive on the Cordyceps platform, as even the ETH sitting in risk and hedge vaults can be deployed to yield additional returns.
This functionality provides the first use case of how participating in the Root ecosystem will unlock a vast range of technical and commercial opportunities for Cordyceps that will allow it to go beyond what any regular, isolated crypto insurance protocol could offer on its own.
Up Next… ve(3,3) + Crypto Insurance = 😊
So, Cordyceps will have a range of features that deliver the world’s first personalized crypto insurance solution that meets the bespoke needs of DeFi users. It will allow users to create their own tailored insurance events and custom oracles, as well as introduce an innovative range of vault tokens with a secondary market for trading them. Furthermore, it will harness synergies from being part of the broader Root ecosystem.
However, these features just scratch the surface of Cordyceps’ plan for revolutionizing the DeFi insurance sector. In our next article, we are going to be discussing some more exciting innovations that Cordyceps will showcase. Ever wondered how ve(3,3) dynamics might be applied to a crypto insurance solution? Well, you are about to find out…
In the meantime, make sure you are following us on Twitter / X at @Cordyceps_xyz to ensure you are the first to hear about any updates.
TL;DR
Current crypto insurance & risk management solutions offer a one-size-fits-all approach that is ill-suited to the unique needs of individual DeFi users.
Cordyceps solves this by offering a range of features allowing users to create highly personalized insurance and risk management strategies.
Cordyceps’ users will be able to define their own risk events, allowing them to manage the specific risks that are relevant to their DeFi strategies.
They will also be able to create custom oracles, whilst also participating in an innovative secondary market for vault tokens.
Together, these features will combine to deliver the world’s first truly personalized crypto insurance & risk management solution.
Introducing The World’s First Personalized Crypto Insurance & Risk Management Solution
As discussed in our article introducing the protocol, Cordyceps is a next-generation DeFi risk management platform. It provides insurance for pegged assets like stablecoins and LSTs, and a speculation market for related events. But there is a lot more to the protocol than just that. In today’s article we’ll be explaining the 7 features that make Cordyceps’ insurance solution unique in the DeFi market and how these features will revolutionize the world of crypto risk management.
Let’s start by looking at the feature that most differentiates Cordyceps from other crypto insurance offerings, namely the ability to create their own insurance events and get personalized coverage for those events:
1. Empowering Users To Create Their Own Insurance Events
The current generation of crypto insurance offerings only allow users to insure themselves against a limited range of pre-defined events. Protocols like Y2K offer insurance against depegging events, whilst protocols like Nexus Mutual offer broader coverage for events such as failures in individual protocols or ETH validators. What unites all these platforms is that the risk events in question are all defined by the protocol itself. Whilst there is a place in the market for such solutions, it is not possible for them to answer to all the unique ways in which different DeFi users may wish to de-risk their activities. The DeFi market is defined by extremely complex and individual strategies that are unique to each user. So, the type of risk that one user wants to insure against will often be very different to the type of risk that another user wishes to mitigate. Therefore, a one-size-fits-all approach does not offer a good product-market fit for the highly personalized world of crypto. This is the key challenge that Cordyceps provides a solution to.
Rather than selecting from a range of predefined events, Cordyceps users will be able to create and define their own risk events. This means that they can manage the specific risks that are relevant to their own DeFi strategies with the level of specificity required by a sophisticated DeFi stakeholder. It also fosters an inclusive approach where the structure of the insurance products is always driven by the users of the protocols themselves rather than the protocol developers. This captures the decentralized spirit of DeFi, whilst also crowdsourcing the wisdom of the collective to constantly generate new types of risk events that may be relevant to other users. Most importantly though, it means users are managing the specific risks that are important to them rather than having to compromise to the nearest available predefined product offering. This is why Cordyceps represents a revolution in the crypto insurance market. Why use a generalized insurance product when Cordyceps allows you to design a risk management strategy specific to your unique strategies and goals?
But creating custom insurance events is not the only area where Cordyceps innovating on personalizing the risk management experience for its users…
2. Allowing Users To Create Custom Oracles
Most existing crypto insurance offerings are further delimited by a reliance on Chainlink oracles, which again narrow the degree to which users can tailor their risk management strategy.
As a protocol built around the understanding that effective crypto risk management involves a high degree of personalization, Cordyceps provides a solution to this. By implementing a flexible structure that invites users to create their own custom oracles, Cordyceps enables integration with a much wider range of events. Of course, the range of possibilities of these oracles will be limited to specific, simple use cases relevant to risk events on the platform, so are not designed to compete with Chainlink more generally. But they will provide just enough flexibility to provide the technical infrastructure Cordyceps requires to offer insurance and risk management that meet the highly personalized needs of crypto users.
3. Designing Vault Tokens Around An Innovative Range Of Underlying Assets
In-keeping with Cordyceps’ broader strategy of maximizing flexibility for users, it will be using ERC1155 tokens for as the underlying assets for its vault receipts. ERC-1155 tokens offer the capability to manage an infinite number of tokens within a single, smart contract, providing the kind of flexibility and scalability that sits at the heart of the Cordyceps philosophy.
There will also be an opportunity to trade these vault tokens on a secondary market within the Cordyceps platform…
4. Establishing A Secondary market For Cordyceps Vault Tokens To Promote Liquidity & Tradeability
It is important that there is a mechanism for ensuring that the vault tokens have robust value. Because these tokens would not be available to exchange on third-party DEXs etc., Cordyceps will build its own secondary market where users can buy and sell their vault tokens using ETH. Not only will this bolster the value of the tokens themselves, it will also encourage yet more user participation, creating an insurance protocol with a variety and depth of user engagement opportunities like no other.
5. Option To Make Deposits Using Tokens From The Root Ecosystem
To create further options for personalization and flexibility, Cordyceps will allow users to make deposits using CDP tokens as well as tokens from the Root ecosystem. And this won’t be the only way that Cordyceps benefits from being part of the Root ecosystem…
6. Integrating Into A Unified DeFi Operating System That Will Help Cordyceps Scale Its user Base, Technical Infrastructure, And Partnerships
Cordyceps is one of the first protocols created by Root. Root is developing a comprehensive operating system for DeFi, using its unique Root & Stem incubation model. Under this model, Root’s internal DeFi Lab Bloomworks incubates Stem protocols that focus on key DeFi market inefficiencies. It then integrates them into its Sprout operating system, which is designed to be a one-stop-shop for DeFi. As one of the first Stem protocols in the Root ecosystem, Cordyceps benefits from a range of network effects. Firstly, as it is integrated into Sprout, Cordyceps will get exposure to the entire combined user base of all the apps in the Root ecosystem, thereby providing a pipeline of new users to onboard. Additionally, there are a range of exciting technical collaboration opportunities that are emerging between Cordyceps and other Stem protocols, helping them to become more than the sum of their parts.
For example, here is how Cordyceps will be capitalizing on its relationship with Torus, which is one of the other Stem protocols being developed by Root…
7. Forging A Partnership With Torus To Offer Additional Yield Strategies That Efficiently Utilize Idle Funds On Cordyceps
One of the other protocols in the Root ecosystem that Cordyceps will be developing a close partnership with from the beginning is Torus. Torus is revolutionizing liquidity distribution and yield across multiple prominent automated market makers (AMMs) including Balancer, Curve, and many more. By driving liquidity wars, mitigating centralization, and embracing the LSDfi narrative, Torus empowers users to actively shape the future of DeFi.
Cordyceps will offer a seamless connection with Torus to deliver additional yield strategies that create value out of idle assets on the Cordyceps platform.
During the course of an insurance event, the ETH that has been placed into the risk and hedge vaults remains dormant, meaning it is not generating any returns. However, Cordyceps’ connection with Torus provides a solution to this challenge. Users will be able to direct their dormant ETH towards Torus, where they can then take advantage of the many yield strategies that Torus offers its users. Torus’ yield generation mechanisms span multiple tokens including CRV, CVX, and Torus tokens, in keeping with Cordyceps unifying vision of providing flexibility and personalization for users. This connection means that no asset will ever remain dormant or unproductive on the Cordyceps platform, as even the ETH sitting in risk and hedge vaults can be deployed to yield additional returns.
This functionality provides the first use case of how participating in the Root ecosystem will unlock a vast range of technical and commercial opportunities for Cordyceps that will allow it to go beyond what any regular, isolated crypto insurance protocol could offer on its own.
Up Next… ve(3,3) + Crypto Insurance = 😊
So, Cordyceps will have a range of features that deliver the world’s first personalized crypto insurance solution that meets the bespoke needs of DeFi users. It will allow users to create their own tailored insurance events and custom oracles, as well as introduce an innovative range of vault tokens with a secondary market for trading them. Furthermore, it will harness synergies from being part of the broader Root ecosystem.
However, these features just scratch the surface of Cordyceps’ plan for revolutionizing the DeFi insurance sector. In our next article, we are going to be discussing some more exciting innovations that Cordyceps will showcase. Ever wondered how ve(3,3) dynamics might be applied to a crypto insurance solution? Well, you are about to find out…
In the meantime, make sure you are following us on Twitter / X at @Cordyceps_xyz to ensure you are the first to hear about any updates.
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