The Unslashed policies listed thus far in the Spartan bucket are categorized as “low risk” and their yield reflects that. In the future, the plan is to have multiple buckets with differing risk profiles, but that may take some time. Up to this point, the Spartan bucket is only listing low risk policies.
Over the past couple weeks there have been a handful of community discussions that have made me think about the idea of how to provide some momentum in the shorter term while still keeping a path for the long term plan in place. One of these options would be to add the ability to list medium risk policies to the Spartan bucket until a specific medium risk bucket is launched.
Some rationale for this proposal:
Importance of speed and market share. Currently, since we only have a low risk bucket, that is a barrier to finalizing some partnerships/policies that may fall under the medium risk category. Rather than waiting for the structure for the medium risk bucket to be completed, adding medium risk policies to the Spartan bucket will enable Unslashed to finalize the policies and announce additional partnerships.
Additional Yield- Due to the risk/reward profile of the medium risk policies, but listing them in the Spartan bucket, we would see additional yield to capital suppliers.
Business Development- By doing this, it may make other protocols more aware of the ability to be insured by Unslashed and also may make Unslashed more attractive to stakeholders looking for additional yield.
Medium Risk Policy Definition:
I know many people are curious about risk calculation and what determines low vs medium risk. For the purpose of the proposal, “medium risk” policies would be for protocols that are:
• Newer projects but have larger TVL and audited by companies with strong reputations
• Projects that are established yet may have had old issues in the past (such as a hack or smart contract vulnerability) but since changed how they approach security (multiple audits, code review) after that and had 6+ months without any issues.
I am proposing that we enable the ability to add medium risk policies to the Spartan bucket until a medium risk bucket is launched.
Per the discussion below:
- The team will define the initial minimum criteria for medium risk policies as we are in a Carte Blanche period.
- Following the Carte Blanche period, the DAO can vote to help evolve the criteria should this be needed.
This will provide the above benefits and while it introduced some additional risk to the bucket overall, capital suppliers will be rewarded for that risk with additional yield.
I would like to have discussion from the community and then put this to a vote on snapshot.
Opening a vote on Scattershot here: Scattershot (fork of Snapshot)