No partner integrations.
Impermanent loss is a big problem in DeFi but nobody really talks about it, even though almost half of Uniswap v3 LPs end up worse off than if they'd just held. The existing fixes don't work for normal users: manual hedging takes constant attention, wider ranges kill your fees.
Took Aave Umbrella as inspiration and built BackStop — the "insurance" for Impermanent Loss instead of bad debt.
What makes BackStop unique is the pricing mechanism: instead of a fixed premium or oracle-estimated risk, the pool's own realized volatility — measured directly from its price history — prices the insurance. The market literally prices its own insurance, with no external dependencies.
The impact comes from making liquidity provision a sound trade for normal users. If LPs are protected, they stay longer and deeper, which means tighter spreads and more volume. Underwriters get a new yield primitive. Traders pay the exact same fee.
The hardest part was getting the fee splitting right — traders should pay the exact same fee as on a normal pool, with the redirection to underwriters happening invisibly. Using beforeSwap to set a dynamic LP fee and afterSwap with a return delta to capture the difference took a lot of iteration, especially with the dual-asset reserve.
This kind of project really needs someone with actuarial or quant finance expertise to calibrate the economics properly across different market regimes.