Ozone is an insurance mutual protocol that facilitates levered coverage of technical failure risks in the Terra DeFi ecosystem. Insurers can deposit X UST and provide coverage up to N * X UST to cover various TeFi contracts, N being the leverage constant set by governance. When Ozone is “overleveraged”, the system calibrates itself to its target leverage ratio by increasing the emission of the $OZ governance token to insurers.

The insurer can provide leveraged insurance through ozone, which locks up UST for varying periods of time, and earns yield from various TeFi contracts.

Depositing into a covered vault allows the user to purchase ozone coverage for TeFi yield farming in exchange for paying a cut of the resultant yield.