Airbag is parametric, provably-solvent cover for USDG. Underwriters back it from their own wallets through 1inch Aqua; buyers hold a transferable note. When the price breaks the band, the payout fires automatically, in one transaction — no claims desk, no custody.
Regulated stablecoins like USDG are moving into payments, payroll and treasuries — and a peg is only as strong as the bank the reserves sit in. When it wobbles, holders have nowhere to go: on-chain cover barely exists, and what does exist pays out after committee votes and waiting periods.
Circle disclosed $3.3B of reserves stuck at Silicon Valley Bank; the “safest” stablecoin lost 13% overnight and took ~3 days to recover.
CNBC ↗On-chain insurance capital is in the hundreds of millions against ~$100B of TVL — over 98% of deposits are naked.
bex.co ↗Paxos' Global Dollar is issued under Singapore's MAS framework and the EU's MiCA — the kind of dollar businesses actually hold.
CoinGecko ↗Parametric trigger + keeper: the payout lands in the holder's wallet in the same block the price breaks the band. No claim at all.
try it ↗The whole protocol, start to finish — covered end-to-end by the Lifecycle test suite against the real Aqua contract.
An underwriter commits USDG to a cover market through 1inch Aqua. Aqua records a virtual balance — the tokens stay in the underwriter's own wallet, free to sit in a vault and earn yield. No pool, no custody, no TVL honeypot.
Premium is priced on a utilization curve — the fuller the book, the pricier the cover. It's pushed straight into the underwriter's reserve, and the buyer receives an ERC-6909 CoverNote: transferable, so cover can be sold or assigned.
The moment the trigger fires, a permissionless keeper calls payout and the USDG lands in whoever holds the note — pulled straight from the underwriter's reserve in one transaction. The insured doesn't even need to be online. No claim form, no committee, no waiting period.
Policies that lapse are settled by anyone — a keeper, the underwriter — which frees the capacity for the next buyer. The underwriter's P&L is simply premiums earned minus payouts made, and it's verifiable on-chain at every block.
Every market enforces a solvency floor: outstanding cover can never exceed a fixed share of the reserve. Try to oversell and the transaction reverts. Anyone can read solvency() and check the backing at any block.
The core CoverApp handles reserves, pricing, notes and payouts. What counts as an "event" is a plug-in: the built-in depeg band, or any contract implementing ITrigger.
Oracle band trigger (Chainlink / Pyth adapters with staleness checks). Pays 100% of notional — pushed automatically.
Proportional payout when a tokenized stock gaps down — pays by how far it fell below the strike, not all-or-nothing.
Junior first-loss / senior-protected waterfall. Two risk appetites, one reserve.
The reserve earns savings-vault yield while it backs cover, withdrawn just-in-time only when a payout fires. Underwriters stack premium + vault APY.
Every underwriter publishes their own risk curve; the CoverRouter splits each order across the cheapest ones in one atomic transaction.
CoverHook measures an LP's real IL on a v4 pool; ILTrigger pays it out through the same claim — with a deductible, a cap, and a same-block manipulation guard.
No new token, no new pool. Airbag composes infrastructure that's already live.
Shared-liquidity virtual balances: capital stays in the maker's wallet.
Paxos-issued, regulated stablecoin — cover denominated and settled in USDG.
Optional hook for LP impermanent-loss cover on v4 pools.
Cheap enough to make per-policy notes and permissionless expiry practical.
Open a market as an underwriter, buy cover as a holder, and watch the airbag deploy when the oracle drops.