Our Value to DeFi Projects 🤝

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As a first step to our long term vision of providing coverage on anything, Stag Finance will initially focus on protecting against risks in the DeFi space, notably smart contract risk. Allowing DeFi users to be protected against smart contract risk promotes confidence and trust between protocols and their users. This would ensure the sustainable growth of the DeFi space.

(DeFi) Risks

It goes without saying that all investments carry some degree of risk. As a (potential) investor, you can generally do either of the following about risks:

• Avoidance. Avoid investing at all. Zero returns, but hey, zero risks!
• Absorption. Absorb all risks and potential loss — take the chance and pray shit doesn’t hit the fan.
• Transfer. Transfer the risk to a pooled group of risks. Pay a small amount of money today to guard against the possibility of a huge unexpected loss.

ALL DEFI INVESTMENTS ARE RISKY, BUT SOME ARE MORE RISKY THAN OTHERS

Risk permeates the ever-changing and unpredictable world of DeFi. From inherent financial risks in any investment to smart contract risks unique to DeFi, investors could potentially lose money in a plethora of ways. News of DeFi exploits and hacks (which have caused losses in the hundreds of millions of dollars) inevitably repels the average DeFi participant to invest and discourages the mainstream from taking their first step into DeFi.

Stag Finance was created to facilitate the transfer of risks and in so doing, we hope to encourage higher levels of investment activities in DeFi and contribute to the sustainable growth of DeFi.

How Stag Finance helps DeFi projects

As alluded to above, the fear of risks surrounding a DeFi project can deter potential investors. These risks are accentuated for newer DeFi projects that are unproven. Even for established DeFi projects that have gone through rounds of full audits and have eliminated the possibility of any exploits from malicious actors, we have seen how certain changes in external factors driven by benign commercial reasons can cause losses (e.g. losses suffered by investors of a yield aggregator caused by a change in fee structure of an underlying yield generating source).

Due to the nature of DeFi, most investors have very little options for recourse even when their losses were caused by someone at fault — investors can only look to the project’s team to compensate out of goodwill or pray for the blockchain’s creator to take certain drastic measures to reverse such losses.

With Stag Finance’s cover protocol, investors can transfer risks and invest in DeFi projects with the assurance that if anything goes south, they are able to cover their (potentially huge) losses. This would encourage higher levels of participation for DeFi projects. Further, DeFi projects can also use our products to show confidence in their own projects and provide greater reassurance to their investors.

Stag Finance’s Potential

Against the backdrop of high risks, uncertainty and bad press, DeFi projects are faced with an uphill task in reassuring their users that their investments are safe. The nature of DeFi excludes the option of turning to a central authority or enforcement agency for effective recourse. As such, investors have to be wholly responsible for ensuring the safety of their investments.

The trend in DeFi hitherto has been chasing the highest APYs available in the market. With increasing numbers of exploits and scams, investors are now factoring risk into their investment decisions. For the increasing numbers of institutional investors, risk definitely has to be mitigated.

With the focus shifting to risk management, it is clear that Stag Finance has tremendous potential. Being one of few tools for risk management in the market, we are confident that our products will have a place in the portfolio of the prudent investor.

Join Us

💻 Website: https://stag.finance
👾 Discord: https://discord.gg/5FN7VTWrWh
🐦 Twitter: https://twitter.com/StagFi_Official
📰 Medium: https://medium.com/stag-finance
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💬 Telegram: https://t.me/stagfinance