We are happy to announce that our staking infrastructure is now insured via a fully licensed and regulated third party provider. This offering removes one of the key risk factors associated with operating Proof of Stake infrastructure. To our knowledge, we are the only staking providers to have their infrastructure insured in this manner.
Staking on Proof of Stake networks is becoming an increasingly attractive way to earn yield from token investments. By staking, investors can earn annual returns sometimes as high as 100% APY. Token holders who stake can increase their share of the network in comparison to token holders who don’t stake and can safeguard themselves against price depreciation with the annual yield. But with rewards, come risks.
Many Proof of Stake networks have unbonding periods and slashing penalties to disincentivize validators from acting maliciously on the network. When a validator gets slashed, the tokens staked and delegated to the validator are lost and become unrecoverable to the original holders of the tokens. Unbonding periods and slashing penalties vary from network to network, but can be as high as 100%.
The risk of slashing can discourage staking. This can result in a lesser number of validators supporting a network which creates a less decentralized network. Thankfully, our insurance now covers our infrastructure on the majority of our supported networks that have a slashing mechanism.
“Our insurance agreement is a first for the industry. Removing slashing risk from staking will allow us to continue to scale our staking infrastructure support across the entirety of the Proof of Stake ecosystem.”Lorien Gabel, CEO at Figment
As with all insurance policies, we hope that we never have to use this coverage. We have built the most advanced staking infrastructure by applying 30+ years of real world experience operating critical Internet infrastructure. Our mixed cloud and hardware environment allows us to maximize for security and minimize risk on a network-by-network basis. Insuring our infrastructure stack allows us to further minimize our risk.
Figment’s purpose is to build a better Internet by increasing usage of the next generation of Proof of Stake blockchains.
These efficient blockchains give people greater control of their data, more privacy, and increase financial inclusion. By eliminating intermediaries they also limit the power of centralized data monopolies, rent seeking financial institutions and anti-social algorithms.
We bring our mission to reality by helping investors stake their tokens; earn yield and participate in securing the blockchain. Our Hubble and Prime applications as well as our governance expertise allow token holders to analyze, monitor and make informed decisions. We build Web 3 developer communities via our Learn education program and then make it simple for these developers to launch applications and manage smart contracts via our DataHub platform. And finally by building and operating The Graph based indexers we enable the efficient search and querying of blockchain data.