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Risk Harbor’s Automated Cross-Chain Smart Contract Is the Most Elegant Way to Manage Risk.
Risk Harbor, on August 24th, has launched the automated cross-chain smart contract risk and depeg projection for UST and Anchor.
The system can automatically protect the risks on Anchor and depegging events of UST via EthAnchor bridge. The users can leverage the 20% rewards for depositing UST on Anchor in a secure manner.
Let’s briefly understand what Risk Harbour is
It is a risk management marketplace for DeFi utilizing wholly automated and transparent prices for protecting the stakers against hacking and cyberattacks. Risk harbor aims to protect the users’ capital in the Decentralized Finance projects.
The growing numbers of hacks in the Defi systems made it clear that there is a considerable requirement for risk management against the attacks and hacks. Risk Harbor utilizes impartial and automated algorithmic claims for protecting the users against the attacks in a secure manner. The system is highly efficient, allowing the participants to have instant claims and payout and offering the lowest rates.
Understanding the role of Risk harbor in UST depeg protection
First of all, you must be aware of the algorithmic stablecoins. UST is an algorithmic stablecoin which means that it can automatically increase or decrease its supply to maintain its value. As in the case of UST, sometimes, the stablecoins lose their pegs. In other words, UST sometimes doesn't retain its peg to dollars and keeps peaking below the dollar.
Here, Risk harbor protects the UST holders from peg loss by checking the time-weighted average price of wrapped UST to USDC on Uniswap V3, over 1 hour. The claim is said to be valid if the price falls below the predefined loss threshold, and then the UST holder can swap their UST to USDC. If the price doesn't fall below the predefined loss threshold, then the claim is rejected.
Understanding the role of Risk harbor in Anchor risk protection
We are aware that Anchor is a cross-chain yield farming protocol that is built in the Terra ecosystem. It takes deposits in UST, and we know that UST is an algorithmic stable coin that sometimes can be unstable.
Here, Risk Harbor utilizes the EthAnchor bridge for protecting those users who stake on Anchor Protocol. Through the EthAnchor bridge, it checks the redeemability of aUST to UST. The users will be able to swap the aUST to other derivatives if the redeemability is considerably lower than the expected value.
More robust risk management solutions are indeed critical for the widespread adoption of decentralized finance because the investors should feel safe putting their capital into it. Risk Harbor can prove to be the marketplace that can help in the broader adoption of DeFi.
Risk harbor is launching the gateway based on ethereum for making the purchasing experience better for users because it will not require additional charges. Through this, users can easily purchase the protection for UST on the Ethereum chain itself.
With its first-ever automated cross-chain smart contract for risk protection, it can potentially become the leader in the Decentralized Finance risk management space.