However, the claim process, an indispensable part of the insurance cycle, did not come until last week when the first claim request was submitted. While we were happy for our users that their assets are safe and anticipated no claims at all, it is a good opportunity for us to validate the end-to-end business cycle with this claim properly handled. We believe fair and justifiable claim handling is key to the success of InsurAce Protocol.
Here is a wrap-up of how this assessment was processed at different stages following our established claim assessment process and completed successfully.
Claim Assessment Process
For InsurAce, the claim assessment is jointly handled between the Advisory Board and our community Claim Assessors through claim investigation and community voting. Below is a simplified flow of our claim assessment process, whereas the detailed assessment process can be found here.
Execution of the Process
#Stage 1: On receiving the claim request
The applicant submitted a claim request on 17/06/2021 regarding the smart contract vulnerability cover he bought for Autofarm Protocol (Polygon), claiming for a loss from the IRON-USDC SLP he staked on Autofarm as a result of an attack on Titan. Below is the claim request details submitted by the applicant:
#Stage 2: Investigation
Following our claim assessment process in Figure 1, the InsurAce Advisory Board started the investigation to verify the case right after receiving the request based on the materials applicant submitted and other information available online. The investigation was completed on 21/06/2021.
By analysing the root cause of the loss as well as making reference from our Smart Contract Vulnerability Cover Wording, the Advisory Board made a Claim Reference Report containing the investigation findings, and proposed a claim payout advice of “Reject” based on the following reasons:
- The applicant’s loss is due to the IRON’s price drop as per the above incident description, his IRON-USDC SLP amount was actually not lost or affected.
- The Autofarm protocol functioned as usual, there is no actual amount loss due to smart contract bug of the Autofarm protocol.
- According to the #3 and #6 of Exclusions in Smart Contract Vulnerability Cover Wording, this claim request should not be paid.
#3. Any losses due to devaluation of Insured’s assets, regardless of such devaluation is related to the Attack or not
#6. Any events where any other external interoperable or interactive smart contracts, are hacked or manipulated in an unintended way, while the Designated smart contract continues to operate as intended
The claim reference report was then published to the community, serving as a reference analysis and advice for our community claim assessors when assessing the claim payout during the Community Voting stage. Refer to the full report for details.
#Stage 3: Prepare for Voting
Considering this is the first claim request, we leave 2 days for the community to stake in INSUR and become claim assessors. The staking portal is built in our dApp, and eventually 54 users participated in the staking and became the assessors.
#Stage 4: Community Voting
The Community Voting started on 24/06/2021 09:10:17 AM (GMT+8) and ended on 25/06/2021 09:10:17 PM (GMT+8), lasting for 36 hours. Among the 54 claim assessors, 45 participated in the voting, sharing a total claim assessment reward of 1000 INSUR tokens.
The voting result was “Reject” with 3,451.5 Accept vs. 79,562.5225 Reject. This voting result was deemed valid as the participation rate was above 75% and a consensus was reached within the voting window. Detailed voting rules can be found here.
#Stage 5: Open for Complaint
To provide a window for the claim applicant to raise their voice if they do not agree to the final verdict, an “Open for Compliant” period of 24 hours is designed in the whole claim process. As for this case, this period started from 25/06/2021 09:16:00 PM (GMT+8) and ended at 26/06/2021 09:10:17 PM (GMT+8), in which no complaint was raised. Check the record here.
#Stage 6: Conclusion and Payout
The Community Voting was valid with a result of “Reject”. No complaint was raised. Therefore, this claim request was Rejected at the final stage following the whole process and no payout was made thereafter.
Summary
With the completion of this claim request, the end-to-end full business cycle has been validated and proven to work well. While we anticipate this process never be activated again in the hope that our users’ assets to be in ultra soundness, we are also confident that our protocol has the capability to provide reliable and trustworthy service in the event of unfortunate situations.
Once again, we look forward to safeguarding your DeFi journey.
