We have already launched a full beta version on the Ropsten Testnet. We plan to arrive on mainnet within 8 weeks on EVM-compatible chains.
Our focus at the moment is acquiring partnerships with protocols who are looking for coverage. This will help us acquire TVL and kickstart the Third Wall.
We believe Third Wall will become the gold standard for Defi Coverage because it minimizes trust assumptions. With our optionality architecture, Policyholders can be certain that they will always have the choice to trade their redemption tokens for the underlying assets at any time while their policy is active. No matter what, a policyholder can use DeFi with confidence, knowing there is a pool of assets waiting for them as backup.
This is superior to a solution like Nexus Mutual, where the policyholder has to trust that a set of voters will come to the right decision. We also have some innovative solutions to improve capital efficiency and price discovery, which we hope will produce a more robust marketplace for coverage.
Underwriters are compensated for taking on the risk that the protocol they are underwriting for will get hacked. Underwriters are compensated in three ways.
Firstly, underwriters receive premiums from those looking to purchase coverage. Secondly, underwriters will receive Third Wall governance tokens as part of our liquidity mining incentive programs.
Finally, Third Wall will allow underwriters to underwrite with yield-bearing assets. For example, if they are underwriting for a Pickle Finance 3CRV pool which has an underlying asset of USDC, an underwriter may be allowed to underwrite with CUSDC. This means the underwriter will be earning some additional yield while they are underwriting and earning premiums and liquidity mining incentives. We are still determining which yield-bearing assets Third Wall will accept as underwriting capital. But this will be necessary to ensure yields are high enough for underwriters.
We are specifically targeting money markets and yield aggregators with our optionality architecture. For these types of protocols, underwriters will be taking on similar risks as they would under Nexus Mutual's architecture for example.
For money markets/yield aggregators, redemption tokens should always increase in value. So underwriters would only be exposed to loss under specific extraordinary conditions such as a hack or perhaps a stablecoin de-pegging in certain cases.
For this reason, we do not believe the coverage with our put option model should be more intrinsically more expensive than coverage policies with more traditional terms.