With the growing importance of sidechains in DeFi, we are very excited to offer bridge protection to the largest and most robust sidechains. As you can see from the Opium CDS smart contract, our insurance is decentralized and tradable, and it can be purchased as a token or sold through Opium Staking.
Sidechain and Layer 2 – The Importance of Bridging
Layer 2 solutions (L2) typically use cryptography and game theory to ensure that off-chain transactions are transmitted correctly to the main network. A sidechain is usually an offshoot of Ether or other blockchain that can offer users lower gas fees due to its unique advantages and transaction volumes. Using a bridging method this sidechain is connected to the main network. It is safe to say that the sidechain has as good performance as its bridge.
Sidechaining is a fantastic mechanism to move some assets and protocols out of the main Etherchain. However, not everyone knows that all the assets of the sidechain are owned by the “bridge contract” on the Ethernet mainnet.
There are several ways to protect bridges, create decentralized bridges and distribute governance among trusted people. We believe that we should take the right approach to the development of such a promising and scalable solution. There are many ways to create secure bridges and creating decentralized bridges with decentralized governance is one of the best solutions. We believe that this is the right and scalable solution.
In the meantime, we are pleased to introduce our own solution, the “Opium Bridge Protection” tokenized and tradable decentralized insurance. Anyone who is bullish on the bridge can pledge funds and earn fees by selling the insurance, while users seeking protection can purchase the insurance on a monthly basis.
Opium Decentralized Insurance at a Glance
Pledge Return – High APR due to high risk
When you place assets in a pledge pool (for a specific bridge), you get a profit on all products covered. By placing funds in a pledge pool, you accept the risk associated with the bridge (just like when moving funds to a sidechain) and gain APR!
Take the risk associated with bridging and receiving APRVS for it is just a matter of transferring the funds to the sidechain
You can redeem once a month or not, and can resell your share at any time.
Everyone in the Opium community is eligible to do liquidity mining.
Users: You adjust coverage monthly and decide whether to cover and pay fees. If you lose assets on the bridge due to a failure or hack, you will be paid out.
Asset Pledge Pool: You can pledge at any time and unpledge every month. You can resell your pledged assets during the month through Curve Financial AMM. At the same time, you get paid by the insurer. If an insured buyer loses assets on the bridge due to a mistake or hack, you will lose your pledged assets.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/opium-decentralized-insurance-for-sidechain-bridging/
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