The blog of the insurance company InsurAce, working in the field of DeFi, reports that it will spend almost $ 12 million to compensate 155 investors who lost money as a result of the collapse of Terra.
For investors, this news has become a light at the end of the tunnel. Recall that the collapse in prices for the UST stablecoin occurred after it lost its peg to the US dollar, falling well below the ratio of 1:1. As a result, the Luna token, now Luna Classic, failed and collapsed from its maximum of more than $ 100 to almost zero.
The insurance company InsurAce has taken the initiative to pay compensation to UST investors who have issued insurance policies in the company. InsurAce debuted on the cryptocurrency market in April 2021 to provide risk protection services in the DeFi industry. Thus, DeFi users have the opportunity to insure their investments against such unforeseen risks as stablecoin pegging or bankruptcy.
Due to the massive loss occurrence, InsurAce incurred expenses in the amount of about $ 11.7 million, while the firm collected only $ 94,000 in insurance premiums from UST investors. The firm has an internal token called INSUR, which is used by investors and stakeholders to vote on various issues related to the insurance organization.
Among the considered applications for the loss occurrence, 155 applications were found to fall under the terms of compensation, 18 were rejected.
Over the next 12 months, we will pay a fixed amount by depositing it into the on-chain pool, from which participants will be able to withdraw the received compensation.
Such a step-by-step approach will help guarantee our ability to help stakeholders compensate for some of the losses while maintaining healthy liquidity in the InsurAce protocol," the insurance company explained.