Risk Harbor, a DeFi risk management marketplace on Ethereum (ETH), will soon assume control of the Ozone protocol of the Terra network, according to a press release published Thursday.
Ozone is a decentralized insurance mechanism that provides coverage in the event of technical failures in Terra’s DeFi ecosystem. The latter is a dual-token platform that features its governance token LUNA and the stablecoin TerraUSD (UST), which has a 1-to-1 exchange rate with the US dollar. UST has no underlying dollar reserves to back it up. Instead, it is guaranteed by a LUNA algorithm, and users can earn rewards by using LUNA to lock in the UST exchange rate. The network has gained significant momentum in terms of total locked value.
Thanks to Ozone, insurers depositing UST can receive coverage when smart contracts do not perform properly on the Terra network, such as when users cannot withdraw their money from UST savings accounts on Anchor Protocol. In the same way, Risk Harbor operates a DeFi center on Ethereum that allows coin holders to secure their DeFi assets for an initial premium. In the process, other users act as underwriters who deposit their risk capital into various insurance guarantee funds for rewards.
Do Kwon, Co-founder and CEO of Terraform Labs, had this to say about the event:
“The talented and ambitious team at Risk Harbor has extensive experience working with DeFi protocols in the burgeoning risk management space, having created one of the leading permissionless hedging markets on Ethereum. We are delighted that the Terra community is letting Risk Harbor will take the reins of Ozone and pioneer the creation of a decentralized and capital efficient risk management marketplace for the wider Terra ecosystem. “
Ozone is currently undergoing an audit by blockchain security companies such as Oak Security and Certik. Pending the results of a governance vote from the Terra community, Ozone will be transferred to the Risk Harbor developers for maintenance and management.
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