One month after launching the first decentralized application on the Ethereum mainnet, Uma has already secured its first customer. A week ago, famed rocket company SpaceX announced that it would be partnering with Uma to provide insurance for its launches. Uma built this insurance application on top of the Ethereum blockchain, creating a set of smart contracts that will automatically release payments to SpaceX if a flight is delayed or if the rocket malfunctions.
Uma today announced the launch of a new Uma DeFi insurance policy in partnership with Space X. The insurance product, which is called Uma Insurance, is the first DeFi product that will cover the launches of Space X rockets. The product will be available starting January 2019, with Uma Insurance 1 launching on Space X’s Falcon Heavy in early December 2018.
Decentralized financial platforms (DeFi) Uma and Opium Network have announced the launch of a new – and rather unusual – crypto spin-off product that will allow individual users to act as insurers for SpaceX flights. With the help of the Oracle of the Optimistic Mind, Opium Protocol launches decentralized financial derivatives for SpaceX flight – the first of its kind! This financial instrument could be used to hedge the financial risks of SpaceX’s launch and even generate some revenue. The derivative is based on a decentralised financial infrastructure and is therefore accessible to anyone in the world, the announcement said. 1/ UMA and @Opium_Network have partnered to develop a financial product for @SpaceX startups. This derivative will be paid based on the success or failure of SpaceX’s Smallsat launch. https://t.co/kgYR4ywyUK – UMA (@UMAprotocol) 24. May 2021
How does it work?
Not too long ago, SpaceX, the space transportation company of famed cryptocurrency advocate Elon Musk, launched Smallsat Rideshare, a program that allows small businesses to share rides in space. In other words, the program allows smaller packages to be sent into space at a lower cost. According to SpaceX’s website, companies can ship their cargo for as little as $1 million – a relatively small amount by space industry standards. Rideshare’s first launch, called Transporter 1, took place on January 24 and launched 143 satellites into space. But what happens if the launch fails? To protect against these risks, Uma and Opium now offer DeFi derivatives that allow users to insure their payloads – or make money by becoming insurers – in a completely decentralized way. 3/ Also, payload owners can hedge against the risk of a launch failure. Opium created this product and hosted it on the https://t.co/gYa80VufW7 platform. The platform offers a range of decentralized financial products to hedge investment risk on the Ethereum blockchain. – UMA (@UMAprotocol) 24. May 2021 Simply put, the new product is a binary option – a contract between parties that can only have two possible outcomes. The issuer of such a contract would commit to becoming an insurer by committing a certain number of tokens to the blockchain. In turn, buyers will actually buy insurance for their useful cargo. If the carpool ship then successfully flies into space, the contract receives this result from Uma’s Optimistic Oracle, and the seller receives an insurance premium for his services. However, if the missile crashes and the payload is destroyed, the purchaser of the contact is entitled to a corresponding payment.
Who is it for?
Apart from the fact that it is an interesting and innovative gadget, however, it is not clear who the target audience of this new tool is. Currently, SpaceX already offers payload insurance for about 5% of the cost. And even if the new deal manages to beat Musk’s company, will it really be more attractive? If the market rate is less than 5%, we can show how much cheaper the DeFi makes the insurance. If the market sets a price above 5%, we can make Elon an offer and earn free interest, a spokesman for Opium said. But does Musk – the second richest man in the world with a fortune of more than $150 billion – really need more free money?
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