Curriculum·Junior·J312
Insurance, Hedging, and On-Chain Risk Transfer
Nexus Mutual and FTX Custody Cover, November 2022 to February 2023.33 percent of the capital pool holdings.
Lesson 1 opens on
Voyager Digital and the FDIC, 28 July 2022
Voyager Digital and its executives made statements indicating, directly or by implication, that Voyager itself was FDIC insured, that customers investing through its platform would have their funds insured, and that the FDIC would insure customers against the failure of Voyager. On 28 July 2022 the FDIC and the Federal Reserve Board issued a joint cease and desist letter, stating they had reason to believe those representations were false and misleading and violated 12 USC 1828(a)(4), and demanding immediate corrective action. What actually existed was a deposit account held by Voyager at Metropolitan Commercial Bank, which was itself FDIC insured.
The lessons
- J312-01What can and cannot be insuredState the four conditions a risk must meet before anybody can insure itabout 33 min · opens on Voyager Digital and the FDIC, 28 July 2022
- J312-02Cover protocolsDescribe how an on-chain cover protocol funds, prices and settles a claimabout 33 min · opens on InsurAce and the UST claims window, May 2022
- J312-03Self-insurance and structural hedgesRank the three responses to a risk by what each actually costsabout 33 min · opens on KuCoin, 26 September 2020
- J312-04Building a coverage decisionRun the five-step decision that ends in buy, reduce, or retainabout 43 min · opens on Cover Protocol, 28 December 2020