While the value of stablecoins like Tether (USDT) and USD Coin (USDC) is designed to be pegged to another asset like the U.S. dollar, the crypto industry has been concerned about the viability of U.S. regulatory concerns about tether for years, which has a current market capitalization of more than $ 63 billion.

Now a company intends to protect investors against this scenario on a discretionary basis – and Tether itself supports the game.

Bridge Mutual aims to minimize the risk of losing money through hacking or exploiting, hacking or stealing smart contracts, falling stablecoins prices, and other digital asset vulnerabilities.

Basically, stablecoin insurance is not complicated. If a stablecoin falls below its peg within a certain period of time, the policyholder can request compensation. Oracles check the current price of the stablecoin and then return the total difference between the current price and the anchor price to the investor – albeit in a different stablecoin.

Related: An explanation of what stablecoins are like.

“Smart contract vulnerabilities have become a major risk in the decentralized financial sector and the leading cause of millions of dollars in spending money being lost,” said Paolo Ardoino, CTO of Tether. use. ”Protect yourself from future attacks and build more confidence in DeFi products. “

When Bridge Mutual moved to a decentralized governance model, Tether quickly demonstrated financial support. The stablecoin issuer has provided $ 500,000 to buy back the token – as has Bitfinex, the crypto exchange tied to Tether Limited by its ownership. These tokens should ensure that both companies are involved in the running of Bridge Mutual.

Mike Miglio, Founder of Bridge Mutual stated, “Tether and Bitfinex have been very supportive of the project by connecting us with many other valued projects that are now our partners and they are also determined to help us market Bridge Mutual to support and improve the design and integrate with other platforms and systems. “

According to Miglio, contract holders deposit their funds in pools to use as collateral and can also participate in the platform’s profits and generate profits in exchange for their shares.

Miglio continued, “Billions of dollars are moved in and out of stablecoins every day, with people and institutions implicitly believing that the value of stablecoins will remain stable. “When the coverage for stablecoins is readily available and easy to use, people can increase their exposure to the crypto market without losing sleep over whether all of the value they’ve run up in the stalls is worth it. May be overnight sink to zero. ” . “