Strategic pool

Overview

Strategic pool earns yields by hedging stablecoin depegging risks on Aave and selling its depeg cover on InsureDAO. Liquidity providers end up with a higher return by looping supply-borrow on Aave based on demand-supply of its cover without paying gas and borrowing fees.

When depeg cover is purchased, the pool borrows the amount of its coverage (using flashloan) on Aave and swaps it for USDC on Uniswap v3.

In the event of stablecoin depegging, the pool closes the position and compensates it with profits.

Withdrawals

Users can withdraw their liquidity up to remaining capacity after 5 days of pending after a withdrawal request. Users are still entitled to receive premiums during the pending period. The withdrawable status will continue for 7 days after the pending ends.

Note:

• The pending status will be recalculated if users submit another withdrawal request.

• When the stablecoin price hits the strike price, withdrawal request and depositing will be suspended till the on-chain liquidation judgment is complete.

Fee

The pool takes a 10% performance fee. If the pool is unprofitable, there are no fees charged.

Risk

Interacting with the strategic pool’s smart contract can lead to the loss of all assets that form part of a transaction due to risks including but not limited to: Underlying Asset Risk, Money Market Risk, DEX Risk, Oracle Risk, Smart Contract Risk.

The smart contract have been audited by WatchPug. Despite that, Users are advised to exercise caution and only risk funds they can afford to lose.