Cozy Finance

Other · Underwriting

NetworkOtherUnderwritingParametric-Cover0 coinsVerified

Cozy Finance (Cozy Protocol) lets users buy and sell parametric protection against protocol-specific triggers. Protection markets settle automatically when on-chain conditions fire — no token governs the core markets today.

Parametric protection markets for DeFi protocols.

Protocol TVL

$1.7M

Latest data · 15 min delay

Official Docs Website Twitter / X

Overview Metrics Research Asset coverage Risks Competitors AI agent skills

Research

Components, facts, FAQ, timeline, and tokenomics in one place

Main components (4)

Cozy Safety Module (CSM)

Cozy's current flagship product: a dedicated on-chain pool of capital that protocols reserve to reimburse their users up to a specified cap in the event of a hack, exploit, or other qualifying loss. Suppliers deposit capital and earn creator-defined rewards; if a covered loss is triggered, deposited funds are slashed to pay affected users. Described by the team as FDIC-like protection for on-chain assets.

Protection Markets

Market-based contracts that let protocols spin up insurance-style markets against tail risks (e.g. smart-contract hacks or stablecoin depegs). Buyers purchase protection while providers underwrite the risk and earn fees/yield collected each time protection is bought or sold. Markets support fixed, dynamic, or custom utilization-based pricing and use customizable trigger templates that define payout logic.

Triggers

Configurable payout-condition modules that define what constitutes a qualifying loss for a given market or safety module. Trigger resolution can be automated on-chain or governed by a DAO/multisig chosen by the market/module creator, determining when funds are paid out to protection buyers.

Tranche & Reserve (DeFi Safety Stack)

Complementary primitives in Cozy's broader 'DeFi Safety Stack.' Tranche splits protocol yield into risk tranches where junior stakers absorb losses first; Reserve establishes asset backstops to cover shortfalls. Together with Protection Markets and the Safety Module they form Cozy's layered risk-management offering for protocols seeking safety-conscious capital.

Differentiator

Composable parametric protection markets with automatic settlement — coverage is expressed as tradable positions rather than mutual membership.

Organizational structure

Units & roles

Payom Dousti
Co-founder of Cozy Finance; previously co-founder of Rare Bits. Listed across company profiles as a founder of the protocol (founded 2020).
Co-founder
Tony Sheng
Co-founder of Cozy Finance, previously of Multicoin Capital. At launch he framed Cozy around building blockchain-native risk-management approaches beyond simple position sizing.
Co-founder
Cozy Finance, Inc.
US-based company (founded 2020) that develops the open-source Cozy Protocol and Cozy Safety Module. Small team (reported ~5 employees as of mid-2024).
Operating company

Investment rounds

Date	Round	Amount	Investors	Link
2020-09-03	Seed	$2M	Electric CapitalVariant FundDragonfly CapitalRobot VenturesSlow VenturesVolt CapitalSpencer NoonEd Moncada	Source

Similarity to traditional finance products

How Cozy Finance maps onto established TradFi structures, and where it diverges.

TradFi product	Similarity to Cozy Finance	Key differences
Deposit insurance (e.g. FDIC)	The Cozy Safety Module is explicitly likened to FDIC-style protection: a reserved pool of capital that reimburses users up to a cap when a qualifying loss event occurs.	FDIC is a government-backed guarantee funded by member banks with statutory coverage limits; Cozy is a permissionless, on-chain, capital-at-risk pool funded by private suppliers who can be slashed. Coverage terms are defined per-module by the creator, there is no sovereign backstop, and payouts are limited to deposited capital.
Parametric insurance	Cozy protection markets pay out based on predefined, objectively verifiable trigger conditions rather than a claims-adjustment process, mirroring parametric insurance where payouts are tied to a measurable event.	Traditional parametric insurers are regulated entities carrying the risk on their balance sheet; Cozy is a non-custodial protocol where anonymous providers underwrite risk for yield, triggers are enforced by smart contracts or a DAO, and there is no insurer of last resort.
Reinsurance / risk underwriting pools	Protection providers on Cozy act like underwriters, supplying capital to cover others' risk in exchange for premiums/fees, similar to how reinsurers pool capital against tail events.	Reinsurance is intermediated by licensed institutions with actuarial pricing and legal contracts; Cozy underwriting is open, algorithmically priced (fixed/dynamic/utilization-based), and settled on-chain without counterparties or legal recourse.