The Best Protection
YieldShield guarantees 100% principal protection through its collateral-backed insurance mechanism. If any issue reduces the value of your insured asset, you receive your full principal back by withdrawing the collateral backing your position. This protection operates without legal risk, fine print, or hidden exclusions: all terms are enforced automatically by smart contracts.
100% Protection
YieldShield's protection mechanism is built into the protocol's core design. When you deposit assets to be insured, underwriters provide collateral that is locked in the pool to back your position. The collateral ratio ensures that sufficient capital is always available to cover insured deposits.
If your insured asset loses value due to any event, whether it's a smart contract vulnerability, protocol failure, market manipulation, or any other value-reducing occurrence, you can immediately withdraw the collateral backing your position. The smart contract calculates your principal based on the original value stored at deposit time and transfers the equivalent amount of collateral tokens to you, ensuring you receive 100% of your principal back.
This protection is not subject to approval, assessment, or validation. The mechanism is trustless: you simply choose to withdraw collateral instead of your insured asset, and the smart contract executes the transfer automatically.
Trustless Coverage
Traditional insurance models rely on legal contracts, claim assessments, and manual approval processes that introduce uncertainty and delays. YieldShield eliminates these dependencies entirely through on-chain execution and transparent terms.
Every aspect of the protection operates on-chain, ensuring that all terms and conditions are publicly verifiable by anyone. There are no hidden clauses, no legal interpretation required, and no possibility of terms being changed after your deposit. The smart contract code itself defines and enforces all protection terms, creating true trustless coverage.
What Is Protected
YieldShield's protection covers any event that reduces the value of your insured asset, including:
- Smart Contract Vulnerabilities: Exploits, bugs, or security flaws in the underlying protocol
- Protocol Failures: Operational failures, governance issues, or protocol shutdowns
- Market Manipulation: Price manipulation, flash loan attacks, or other market-based exploits
- Any Value-Reducing Event: Any circumstance that causes your insured asset to lose value
The protection mechanism does not distinguish between different types of value loss. If your asset has lost value for any reason, you can withdraw the collateral to recover your principal.
No Fine Print, No Exclusions
Unlike traditional insurance with complex terms and hidden exclusions, YieldShield's protection operates with complete transparency:
- Transparent Terms: All protection terms are encoded in smart contracts and publicly verifiable on-chain
- No Legal Risk: Smart contracts enforce all terms automatically—no legal interpretation or court proceedings required
- No Exclusions: Protection covers all value-reducing events without exceptions or special conditions
- No Hidden Clauses: Every aspect of the protection is visible in the smart contract code
The absence of fine print means there are no surprise exclusions or conditions that could invalidate your protection. The smart contract code is the complete and final definition of your coverage.
On-Chain Transparency
Every protection detail is recorded on-chain from the moment you make a deposit. The original value of your deposit is stored in the smart contract, the collateral backing your position is tracked transparently, and all withdrawal options are available for public inspection.
This on-chain transparency makes it impossible to hide terms, change conditions after the fact, or dispute coverage. Anyone can verify the protection terms, check the collateral backing any position, and understand exactly what protection is available. This creates true trustless coverage that doesn't rely on legal interpretation, manual processes, or third-party verification.