With the rapid expansion of projects on the Solana blockchain, numerous innovations are capturing attention. Among these, Amulet stands out as one of the most intriguing. This decentralized insurance protocol is designed to provide scalable risk protection within the Web3 ecosystem. By leveraging the speed and efficiency of Solana, Amulet aims to deliver robust and reliable coverage for users, enhancing the overall security and stability of the burgeoning decentralized landscape. Amulet’s innovative approach and essential services are a noteworthy addition to the Solana ecosystem.
What is Amulet (AMU)?Amulet (AMU) is a decentralized finance (DeFi) insurance protocol built on the Solana blockchain. Founded in early 2022, Amulet launched its V1 as the first DeFi insurance protocol on Solana, providing innovative risk management solutions tailored to the unique demands of the Web3 ecosystem. The protocol utilizes Solana’s proof-of-stake network to offer stable returns and comprehensive insurance services through its Protocol Controlled Underwriting and Future Yield Backed Claim mechanism, minimizing risk for underwriting capital providers.
In 2023, Amulet successfully raised $6 million in a seed round led by gumi Cryptos Capital, with participation from Republic Capital, Solana Ventures, DeFiance Capital, Animoca Brands, and other notable investors. This funding round marked a significant milestone in Amulet’s journey, enabling further development and expansion of its platform.
In Q4 2023, Amulet initiated its V2 roadmap with a guarded launch, including Ethereum and Polygon zkEVM deployments and the pre-mining of its native token, $AMULET. The formal launch in Q1 2024 featured a complete security audit, the launch of the Amulet Safety Fund, and more Layer 2/ZK deployments. The roadmap outlines ambitious plans for 2024, including the introduction of governance systems, leveraged strategies, and onboarding insurers and reinsurers.
Amulet’s comprehensive roadmap and strategic partnerships demonstrate its commitment to driving innovation in the DeFi insurance space, ensuring robust protection and profitable opportunities for Web3 users. The protocol aims to become a leading insurance provider in the DeFi sector, leveraging the speed and efficiency of the Solana blockchain to deliver reliable and scalable risk management solutions.
How Does Amulet Work? Automated Strategies and Loyalty ProgramAmulet’s automated strategies generate yield from market opportunities while safeguarding deposited assets through its AmuShield protection system. These yield vaults efficiently manage risk, oversee portfolios, assess underlying protocols, and optimize transaction costs. This automation simplifies user participation, reduces costs, and enhances security.
Amulet V2’s automated yield strategies operate as an on-chain asset manager maintained by a team of DeFi and security experts and governed by $AMU holders. These strategies pool users’ funds from their vaults for auto-compounding in top DeFi projects, minimizing transaction costs and maximizing returns. The auto-compounding frequency is set to achieve the highest possible returns at the lowest cost.
One significant aspect of Amulet’s strategies is preventing theft, a common risk in DeFi. Security experts vet each strategy and incorporate preventive mechanisms and financial coverage under the AmuShield program. For example, the ConvexCurveFRAX+crvUSD Strategy allows users to deposit Convex LP into the vault, earning yield under AmuShield’s protection. Users can also deposit FRAX or crvUSD, used in the Convex yield aggregator’s Curve FRAX+crvUSD pool. Rewards from Curve and Convex are collected and compounded in the vault, ensuring higher user returns.
AmuShield monitors deposited assets 24/7 and initiates emergency asset retrievals if funds are missing from the strategy’s underlying pool. It provides basic financial coverage from the Amulet Safety Fund and handles compensation claims from the underlying protocol on behalf of users. This ensures continuous protection and efficiency in managing users’ assets.
Source: docs.amulet.org
Amulet’s vaults automate the yield-compounding process, reducing gas and transaction costs per user. They monitor vault positions for any attacks on deposited assets. The Amulet Safety Fund and Amulet Treasury charge a small fee on yields to provide coverage and fund protocol operations. This structure supports a secure and efficient ecosystem for yield generation.
Source: docs.amulet.org
To maximize yields, Amulet offers boosted APY through base returns, farming incentives, and governance incentives. Users can stake LP tokens to earn additional yield with $AMU rewards. By locking $AMU for veAMU, users can participate in governance and receive higher boosted rates.
AmuVaults, built on the ERC-4626 standard, power Amulet V2’s strategies. These standardized vaults facilitate integration with top DeFi projects and ensure secure and efficient yield generation. They reduce development costs and enhance security by using hack-resistant smart contracts. AmuVaults issue tradeable shares to users, representing claims on deposited assets and earned yield, increasing liquidity.
The Amulet V2 architecture, centered around ERC-4626 AmuVaults and a dedicated vault manager, ensures secure and efficient management of deposits, storage, and withdrawals. This separation into smaller smart contracts enhances security and mitigates potential denial-of-service attacks.
AmuShield’s components, including the vault manager, Amulet Vault, and Amulet Safety Fund, work together to provide parametric protection for deposited assets. The Amulet Safety Fund offers basic financial coverage and plans to introduce user empowerment, resilience alliances, and amplified risk sharing. Compensation tracking ensures users receive any compensation from compromised underlying pools.
Amulet’s automated strategies offer a secure and efficient approach to yield generation, backed by comprehensive protection through AmuShield. These features simplify user participation, optimize returns, and provide robust asset protection. Next, we explore Amulet’s Loyalty Program, which further enhances user engagement and rewards.
Loyalty ProgramAmuVerse is Amulet V2’s loyalty program, designed to enhance DeFi safety by celebrating and rewarding the community. This program incentivizes users to bring sustainable liquidity and fees to the best platforms in yield and security across chains. It offers a wide range of features and rewards through the Referral Program and the veAMU plan.
The Referral Program allows users to become ambassadors for Amulet. By joining the Amulet Discord channel, following on Twitter, and generating a unique referral link, users can share Amulet’s products and services with their network. When friends, family, or colleagues make a deposit using these strategies, both the referrer and the referred earn rewards. Referrers accumulate Crystals, which can be redeemed for $AMU, entered into future lucky draws, or traded for utility NFTs on the marketplace. This program not only rewards sharing but also strengthens the Amulet community by expanding its user base.
AmuVerse’s veAMU plan offers additional rewards and earnings through a tiered, incentive-driven journey. Users can hold veAMU for greater returns, participate in governance, and benefit from revenue sharing. This plan encourages high-quality yield opportunities and recognizes the community’s commitment to DeFi. Users can earn and accumulate Crystals through referrals, contributing to achieving veAMU status for enhanced rewards.
The AmuVerse dashboard helps users track and manage their achievements and rewards. By participating in the loyalty program, users can easily see their accumulated Crystals and the impact of their referrals. This transparency ensures that community members feel valued and engaged.
Source: app.amulet.org
Amulet’s approach to fostering a vibrant community goes beyond providing security and yield strategies. The AmuVerse loyalty program celebrates and rewards community members for their contributions, promoting sustainable liquidity and fees within the ecosystem. Through the Referral Program and veAMU plan, Amulet incentivizes users to grow the community and participate actively in the platform’s development. This comprehensive approach not only enhances user engagement but also drives the overall success of the Amulet protocol.
Amulet Use CasesAmulet Protocol offers a comprehensive suite of DeFi solutions, blending yield generation with robust security measures. Built on the Solana blockchain, Amulet is designed to provide users with various opportunities to maximize returns while safeguarding their assets. Here are three primary use cases for Amulet:
Yield Generation and Asset Protection: Amulet’s automated strategies generate yield from market opportunities while providing built-in protection through the AmuShield program. Users can deposit assets into Amulet’s yield vaults, which manage risk, optimize transaction costs, and automatically compound returns. The AmuShield monitors assets 24/7, ensuring immediate action is taken in case of any security threats, thus offering a dual benefit of high returns and robust security.Decentralized Insurance: Amulet’s insurance mechanisms protect DeFi investments from risks such as hacks and protocol failures. Utilizing the Amulet Safety Fund (ASF) and partnerships with external underwriters, the platform provides financial coverage for losses sustained by users. This unique approach helps mitigate the inherent risks of DeFi, making it a safer environment for novice and experienced investors.Loyalty and Rewards Program: Amulet’s AmuVerse loyalty program incentivizes community engagement and growth. Through the Referral Program, users can earn Crystals (loyalty points) by referring new participants to the platform. These points can be redeemed for $AMU tokens, used for governance participation, or traded for other rewards. The veAMU plan further enhances user engagement by offering additional returns and governance power to those who stake $AMU tokens.
Amulet’s blend of yield optimization, insurance solutions, and community incentives makes it a versatile and attractive platform for DeFi users looking to maximize returns and enhance security.
Amulet Main FeaturesAmulet offers robust features designed to enhance its users’ security, accuracy, and financial growth, including the Amulet Safety Fund, specialized Oracle integrations, and innovative treasury management strategies. These features ensure a secure and reliable financial environment.
Amulet Safety FundThe Amulet Safety Fund (ASF) ensures financial coverage for users’ assets in case of a vault suspension due to significant price drops. The ASF follows a structured process: suspending the vault, retrieving residual funds, and making them available for user withdrawal. The capacity of each vault, or the amount of financial coverage it receives, is calculated using the total ASF funds, a tier-based security quota, and a default ratio. This capacity determines the maximum payout available. Additionally, this financial coverage, termed Shield Cost, is derived from risk assessments, bundle discounts, and discretionary adjustments.
Oracle IntegrationTo maintain asset security and accurate vault management, Amulet integrates specialized Oracles tailored to different assets and platforms. For Solana LST Vaults, assets like mSOL, JitoSOL, and bSOL use Pyth for real-time market data. Curve Vaults employ a combination of Curve’s Virtual Price Function and Chainlink for precise price monitoring. Other vaults rely on their respective protocol mechanisms for LP price updates. The system uses Oracle data to compare current prices against trigger prices. If a price drop is detected, it activates vault suspension, emergency asset retrieval, and claim payout processes, ensuring timely and reliable protection.
TreasuryAmulet revolutionizes treasury management by reinvesting earnings into protocol development, talent acquisition, and new yield opportunities. The platform also redistributes success through revenue-sharing mechanisms benefiting referrers and veAMULET holders. Amulet Guard supplements these efforts with robust security infrastructure and basic coverage from the Amulet Safety Fund against unforeseen challenges. This approach aligns with Amulet’s commitment to sustainable growth, shared success, and stringent security for its community, ensuring a stable and secure environment for all users.
What is the AMU Coin?AMU Coin is the native token of Amulet Protocol, used for governance, staking, and rewards. Its maximum supply is capped at 1 billion units, of which 354 million (35.40%) are already in circulation (August 2024).
AMU is designed to empower active participation in the veAMU governance and incentives distribution. This allows holders to vote on and implement changes, aligning liquidity and fees with high-quality yield opportunities. Through veAMU, community-driven governance is facilitated, ensuring stakeholders have a direct role in shaping Amulet’s ecosystem growth. 60% of the initial total supply is reserved for business incentives and ecosystem growth, and the balance allocated for fundraising, liquidity bootstrapping, and team incentives.
The distribution includes a 12% allocation for the seed round, 8% for the private round, 15% for team and advisors, 5% for exchange liquidity provision, 15% for DAO reserves, 20% for the protocol risk fund, and 25% for business and community incentives such as liquidity mining, loyalty programs, and staking rewards.
Source: docs.amulet.org
AMU Staking allows users to amplify their rewards by locking their tokens. This offers a pathway to enhanced profitability and long-term sustainability, with staking now live on Solana. Users can lock their AMU tokens to earn rewards based on the amount and duration of their stake, calculated through a specific multiplier.
Governance and veAMU are under development, focusing on using incentives to bring sustainable liquidity and fees to the best platforms in yield and security across chains. By staking assets or acquiring $AMU from exchanges and locking it on Amulet’s platform, users can earn veAMU, which offers greater influence over pool emissions and higher earnings distribution. This initiative aims to promote long-term profitability, sustainability, and higher-quality risk controls within the protocol.
Is AMU a Good Investment?AMU offers strong features, including decentralized governance, yield farming, and robust security measures, making it an attractive option for DeFi enthusiasts. These elements enhance user control and potential returns. However, the DeFi space is highly competitive, with many protocols offering similar benefits. It is uncertain whether AMU will achieve widespread adoption despite its promising capabilities. The success of AMU will depend on its ability to differentiate itself and attract a loyal user base amidst the fierce competition in the market.
How to Own AMU?To own AMU, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account and get it verified and funded. Then, you are ready to go through the steps to buy AMU.
News on AmuletAs announced on Amulet’s Medium channel in May 2024, Amulet has partnered with Cede.store to integrate a non-custodial browser extension for managing centralized exchange (CEX) assets. This collaboration combines Amulet’s risk protection and yield strategies with Cede.store’s robust asset management capabilities. Users can now access and manage their CEX and DeFi assets through a unified platform, ensuring enhanced security and control. This partnership aims to revolutionize investment management by providing real-time data, detailed analytics, and seamless asset transfers in one central dashboard.
Useful ReferencesFor the latest updates about Amulet, you can visit:
The official websiteXTelegramDiscordMediumGitHub
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