Parametric stablecoin cover on Arbitrum. If USDG depegs, a keeper fires the payout and USDG lands in the holder's wallet automatically, with no claim form. Underwriters back it via 1inch Aqua.
AIRBAG
Depeg cover that deploys itself.
Airbag is a parametric insurance protocol for stablecoins on Arbitrum. Buyers pay a small premium and hold a transferable cover note. When the insured event happens (a USDG depeg, a Uniswap v4 LP loss or a tokenized-stock gap-down), a permissionless keeper fires the payout and the USDG lands in the holder's wallet automatically, with no claim form, no committee and no waiting period. Underwriters back the cover from their own wallets through 1inch Aqua, publish their own risk curves and compete on price.
THE PROBLEM
1. Pegs break. On 11 March 2023, USDC fell to about $0.87 after Circle disclosed that $3.3B of its reserves were stuck at Silicon Valley Bank.
2. On-chain cover barely exists. Less than 2% of DeFi's total value locked is insured.
3. Existing cover pays slowly. Claims go through assessment votes, committees and waiting periods. When a peg breaks, holders need the money now.
4. Regulated stablecoins are growing up. USDG is issued under Singapore's MAS framework and the EU's MiCA, so payment apps, payroll tools and treasuries hold it. Those users want protection they can explain to an auditor.
THE SOLUTION
1. Parametric trigger. Each product has an objective trigger: USDG at or below $0.97, LP loss past 0.5%, or TSLAx below $250. The oracle or the pool price decides, so there is no claims process and no dispute.
2. Automatic payout. A permissionless keeper calls payout the moment the trigger fires, and the USDG goes to whoever holds the
note. The insured does not even have to be online.
3. Non-custodial reserve on 1inch Aqua. Underwriterin their own wallet, or in a savings vault earningyield. There is no pooled honeypot, and capital earns premiums and vault yield at the same time.
4. Competitive marketplace. Every underwriter publishes a risk curve. A router splits each order across the cheapest curves in one
transaction.
Cover notes are ERC-6909 tokens, so cover is transfaid. A solvency floor stops any market selling morecover than it can pay. A checkout widget lets any app sell Airbag cover to its own users.
WORKED EXAMPLE
Alice holds 50,000 USDG and wants 7 days of depeg cover. Live quotes from the Arbitrum Sepolia deployment:
Airbag Genesis: 36.54 USDG
Underwriter B: 6.99 USDG
Underwriter C: 18.87 USDG
The router sends her order to the cheapest curve. She pays 6.99 USDG and receives a cover note. USDG then trades at $0.92, below
the $0.97 trigger. Within one keeper round, 50,000 She sends no transaction and fills in no form.
THREE COVER PRODUCTS
USDG depeg: pays when USDG falls to $0.97 or below.
Uniswap v4 LP loss (wstETH/WETH): pays on impermanent loss measured by the CoverHook.
Tokenized-stock gap-down (TSLAx): pays the percentahe $250 strike.
WHAT'S LIVE
Everything runs on the deployed contracts on Arbitr
Buy cover: three products, live quotes, the risk cu underwriters and a one-transaction routed buy.
Automatic payout: a keeper bot fires every triggered policy, and the app shows an "Airbag deployed" banner when the payout lands.
Event simulator: move the USDG feed, move the TSLAx through the v4 pool to trigger each product.
Underwrite: expected APY, premiums, vault yield, payouts, net P&L and loss ratio, plus a draggable risk-curve editor to open a new
market.
Keeper: every open policy with its status, and a keeper round you can run from the browser.
Integrate: a "Protect this balance" widget any app contract API.
SOLVENCY
A market cannot sell more cover than its floor allory buy.
Payouts are pulled from real reserves in the same transaction.
Anyone can read a market's solvency on-chain at any
The CoverHook measures LP loss from the block-open price, so a flash-loan price push cannot fake a claim.
TECH
13 contracts on Arbitrum Sepolia, all verified on Sourcify
34 Foundry tests passing, including an 8,192-call i
1inch Aqua as the reserve layer
Uniswap v4 hook on the official PoolManager, with a
USDG as the insured asset, the premium, the reserve and the payout
Next.js frontend with wagmi and viem
LINKS
Live app: https://airbag.insure
Demo video: https://youtu.be/AGcrzesFw2s
Airbag was built during the Buildathon, and every flow now works end to end on Arbitrum Sepolia.
SMART CONTRACTS
Deployed 13 contracts, all verified on Sourcify.
CoverApp: registers markets, prices premiums on each underwriter's risk curve (annual rate x term), enforces the solvency floor and settles payouts.
CoverRouter: fills one order across several underwriters atomically, cheapest curve first.
CoverNote: ERC-6909 cover notes, transferable, so the holder is the one paid.
CoverHook: a Uniswap v4 hook on the official PoolManager that measures LP loss from the block-open price.
Two triggers on the same engine: LP loss and tokenized-stock gap-down.
YieldReserve: an underwriter reserve that sits in a savings vault and is withdrawn only when a payout fires.
34 Foundry tests passing, including a full lifecycle suite, an 8,192-call invariant fuzz and a real v4 pool suite.
PRODUCT
Three live cover products: USDG depeg, Uniswap v4 LP loss and TSLAx gap-down.
A marketplace with three competing underwriters and a routed one-transaction buy.
A keeper bot that paid out depeg, LP-loss and stock-gap policies automatically.
Underwriter console with a draggable risk-curve editor.
A "Protect this balance" widget and an integrate page for partner apps.
Deployed at https://airbag.insure
DEMO
Recorded demo video with voice-over: https://youtu.
BUGS FOUND AND FIXED
Premiums first ignored the policy term; they are noith a test.
Expired policies first locked capacity forever; expire now releases it.
ALSO BUILT, NOT YET IN THE LIVE FLOW
An aggregate solvency book, junior and senior reserve tranches, Chainlink and Pyth oracle adapters, cross-chain cover and a
slippage-refund trigger.
NEXT STEPS
Mainnet beta: security review, Arbitrum One on the real USDG, Chainlink or Pyth feeds, keeper tips and a reserve lock-up while cover is outstanding.
Distribution: widget partners such as wallets and p
More risk: position-sized LP cover, more assets and cross-chain cover.
Airbag has not raised any funding. It is self-funded and was built during the Buildathon.
We are not running a round right now. After the Buildathon we are open to grants and to conversations with investors and ecosystem partners, to fund the path to a mainnet beta.
WHAT FUNDING WOULD PAY FOR
A security review of the core contracts: CoverApp, CoverRouter, CoverHook and the triggers.
Launch on Arbitrum One with real USDG on the canonical 1inch Aqua.
Chainlink or Pyth price feeds and keeper incentives.
Initial underwriting capital, so the first cover buyers have a reserve behind them.