Inspiration
Having previous experience in the field of Insurance, we saw an unfulfilled need in the DeFi field because of the unprecedented number of hacks. UnoRe was born out of the need to fill the gap of existing insurance protocols in the DeFi space by providing tail risk covers and better returns for capital providers. Our project aims to provide efficient utilisation of underwriting capital to enable provision of insurance coverage across multiple protocols and also allow purchasing of various types of tailor built insurance products depending on the users need.
UnoRe started with a vision. Our vision is to create a simplified platform that would allow the new age insurance providers to introduce innovative insurance products tailored to the community’s needs, in addition to also becoming a platform for investors to make returns using Reinsurance risk pools, one of the world’s safest asset classes in an efficient manner!
What it does
The UnoRe protocol is structured in 2 key components. Firstly, the risk based Insurance and Reinsurance risk pools allows capital providers to earn great yield on their capital by depositing in our SSIP and SSRP risk pools. Our Single Sided Reinsurance pools is one of the DeFi’s first staking vaults which allows users to earn yields for providing extremely low probability tail risk cover on insurance products. It is treated as one of the safest asset classes in the world.
Secondly, our cutting-edge Cover portal allows people to create layered insurance products and also automatically detect the smart contracts where funds have been locked and buy cover against them - all at the click of a single button.
How we built it
Our protocol was built in 3 Phases; First phase introduced the concepts of Cohorts, a time bound event during which insurance products for various protocols are underwritten and packaged into a single investment deal for capital providers. Our first cohort housed multiple pools - Zeus, Athena and Artemis. The objective of these multi-strata pools is to spread risk - each pool comprises different types of covers and uncorrelated asset classes, minimising the risk of collective balck swan events.
In our second phase, we initially launched our Single Sided Insurance pools in $UNO and $ETH which aimed to provide insurance capacity on 90+ protocols against Smart Contract hacks and De-Peg risks. We also introduced De-Fi’s first Single Sided Reinsurance Pools with the aim of providing additional tail risk cover on our cohort 1 pools as well on our SSIP pools which was already providing cover worth up to 1M USD by that time.
The third phase included the launch of our Cover portal, which allowed users to directly purchase cover for over 90+ protocols across 5 different chains. Our cover protocol also allowed users to gain additional insights into which smart contracts they have interacted with in the past which they might need cover for.
Challenges we ran into
One of our key challenges has been with attracting TVL enough to meet the ever growing demand for insurance capacity from our DeFi partners for various products like staking pool covers, De-Peg covers, Oracle covers, Smart Contract hack covers, etc. We are currently in the process of launching our DAO which would allow capital providers to have more control on the type of risks they are taking on the risk pools allowing them to more confidently place their capital with us and increase our protocol TVL.
Our second challenge would be having enough reinsurance capacity to meet the demand we are expecting; as per our tokenomics we have already allocated enough tokens into reinsurance cells to progressively increase capacity to meet demand for the next 4-5 years.
Accomplishments that we’re proud of
During our first phase of our Cohort 1 we were able to sell a total coverage of upto 1.5M USD for a total duration of 1 year across 3 protocols. We were also able to quickly fill out our Insurance pools within 1 week of the dApp launch…
Till date we have sold covers more than 3M USD and accumulated net premiums more than 100k USD across our cover portal and B2B insurance product sales.
At our peak we were able to gather more than 3.5M USD in protocol TVL across both BSC and ETH allowing us to serve insurance capacity up to 10M USD. We were also once on the 5th position in the DefiLama insurance protocols category.
In the month of April one of our partners, Umbrella Network, got hacked and the attacker drained their staking pools. Since this was an event covered under our insurance policy we gave them an insurance payout, however none of our capital providers were affected as we were able to payout the claim just using our insurance premiums.
What we learned
So far we have learnt that there is inadequate insurance coverage out there accessible to DeFi users, inability to access reinsurance, and so on. UnoRe will address these issues and make reinsurance accessible to all. It has also made it clear to us that there needs to be sufficient level of DAO based governance established in order to access higher levels of TVL in any DeFi protocol.
We have also learnt and perfected our art of proper risk analysis for underwriting insurance products for protocols not just based on their smart contracts but also by looking at their tokenomics, team, product maturity, 3rd party dependencies, governance, etc.
What’s next for UNOre
We are working on our V3 where we will be introducing asset management where capital deposited in our SSIPs will be further allocated towards various stable yield generating Stratford like on AAVE, Yearn, Curve, etc. based on expert opinions in the market so that our community can earn more by staking in our pools including best return on their assets. This will allow us to tap into the wider community of yield farmers as they now have an additional option to receive more rewards on top of their stable rewards from these protocols.
Another important update will be our vote escrow based DAO. The aim of this product is to develop a dynamic and interactive interface that provides UnoRe LP token holders the right to create governance proposals on UnoRe products, insurance claims, pools deployments, underwriting new protocol, and also allowing them to vote and receive incentives for their contributions.
We will also be launching an automated claims payout module for users to access auto approved claim payouts without having to wait for a long period of time. For eg: if a user holds a depeg cover and the currency depegs in the TWAP feed for more than a week then they can automatically claim insurance payouts using their insurance policy NFT.