James joins Oliver Xie and Dan Thomson from InsurAce.io from the Ethereum Community Conference in Paris to talk about our recent partnership, how insurance services fit into mStable and the future of DeFi.
Check it out here:
Here is a Transcription of the video:
Speaker: Dan Thomson
Okay, so we are joined here with Oliver from InsurAce.io the founder and project lead. And James Simpson from M-stable. I’m Dan, the director of marketing and business development for InsurAce.io. And today, we’re just going to be talking a little bit about our partnership where both protocols and just how the sort of recent partnership between InsurAce.io to IO and M-stable has benefited everyone. Let’s start with just a couple of quick introductions for you both as well as an overview of your projects. Oliver, you first.
Speaker: Oliver Xie
Okay, sure. Thanks, James, for joining the meeting today. So, I think we had very good partnership in the past few weeks that benefits the users of both protocols. Thanks very much for the support. So my name is Oliver. I’m the founder of InsurAce.io Style Protocol. And at InsurAce.io, we are a DeFi(01:17) insurance protocol targeting to provide reliable, robust and secure DeFi Insurance Services to the DeFi users. Yeah, James yours.
Speaker: James Simpson
Yeah, thanks Dan, thanks Oliver for having me on. We’re really excited about working with InsurAce.io. M-stable has been always kind of concerned with making sure our products are as secure as possible. And it makes sense for protocols to collaborate with Insurance Services. So, I’m the founder of M-stable. M-stable is a suite of stable coin related products. We have a stable coin AMM. We have a savings account, high yielding savings account for USD and BTC and our AMM also generates meta stable coins. So, we have a meta BTC asset and a meta USD asset that’s backed by the reserves of our AMM and others and risk minimization properties baked into the protocol itself. But what’s exciting is working with InsurAce.io to improve those services.
Speaker: Dan Thomson
It’s a really interesting project. I remember when it first came across my desk and when we looked at it and it’s fascinating to deep dive into just as your range of stable coin products. It’s amazing to see how DeFi evolves in that way. Okay, so we’ll just dive right in. Oliver, would you mind explaining to us well, I guess our viewers about how exactly the Insurance Services work to cover the M-stable assets?
Speaker: Oliver Xie
Yeah, sure. So first of all, I think at InsurAce.io what we provide is a market chain DeFi insurance. So as of recently, we have covered over 30 many of DeFi assets for over I think over 40 protocols variety of different chains. So as for M-stable and we have provide coverage for M-stable both on polygon as the theory(03:36). So the kind of service we can provide is mostly on the smart contract security side. So, let’s say M-stable has built an amazing, stable coin products and savings functions there and let’s say if there’s any I mean hacking events happens, those who bought coverages for M-stable smart contracts insurance can get a way to hedge their risk get compensated and this in turn will provide more coverage for external users as well. And also for InsurAce.io, we are more of creating more awareness for our users as well.
Speaker: Dan Thomson
Nice. And yeah James, I guess suppose as a sort of follow up to that, how do you see that best fitting with what you’re doing? You sort of mentioned on it before as a nice sort of add on obviously, no one wants to say that their protocol is vulnerable to any attacks but at the same time as DeFi everything evolves so fast there’s always some potential out there and it’s an outside risk obviously but at the same time, we like to think that the insurance mitigates the risk of any attacks. But how do you see that fitting in with your sort of protocols as it is now and also for the future?
Speaker: James Simpson
Yeah, great question. So, I mean it’s all about peace of mind for the end user and with M-stable and with a lot of DeFi protocols. They’ve been looking at the insurance problem internally and actually, the first iteration of M-stable looked at having our meta token act as a source of revitalization. So, it’s effectively selling if our meta asset loses its peg, we would sell our native token to buy back the meta asset to bring it back to the new level of lower collateral and that could work and we’re actually still looking at ways where we can kind of have an internal Insurance Fund as a first step. But the issue is and maker(05:58) has a similar kind of functionality in their token. The issue with this token is that you kind of have to dump on yourself at the most vulnerable time in your protocol and that’s something that we are trying to work around and I think having third party insurance providers where users opt in to Insurance Services just makes sense. So I think with our safe product particularly, it’s very high yielding safe product that’s been about 10 to 30% API since launch. I think some users wanted to spend a little bit of money on recovering their position, it makes sense. A lot of our LPs have kind of half million to multimillion- dollar positions in save. So I think for those particular users using InsurAce.io makes a lot of sense whereas some users might not want to pay for it if they just have small positions in there.
Speaker: Dan Thomson
Yeah, definitely and you never know where the attacks going to come from if anywhere as much as you could have obviously, your own sort of mitigation against that risk and your own funds in such an event even with Maker(07:19) there’s every chance that it could actually be that ends up being the part of the protocol that gets the attack on it. And like you said for essentially a 30% return annually, our current annual cost on M-stable was around two and a half percent. So, the user is still going to be generating 27 and a half percent but a safe stable return which is essentially the fuel that’s going to ignite the bigger institutions coming into the space. In my opinion, I think that’s the way the future of this is going. Oliver may have his own opinion on it.
Speaker: Oliver Xie
Yeah, so I think one of the other contents of the partnership with M-stable is we actually accept M USD as our underwriting eisah(08:07). So in this way, are actually creating a better fit utility for M USDs for also M USD users and holders can actually use those assets for interest underwriting and earn rewards as well. Actually, I think just a few hours before this meeting, we have seen another big stake in using M USD into our underwriting pool as well. So, I think in this way, we’re actually upgrading it for both protocols.
Speaker: Dan Thomson
Yeah, it’s a great partnership. I mean, I know we’re very happy to work with M-stable and it works both ways and I’m sure there’s plenty more we can be doing in the future as well. So yeah, so I guess the next question for you James would be how are you incentivizing the adoption of insurance for users as you continue to grow? What more can we from InsurAce.io to IO do to get your users on board and how do you see your users adopting our services going forward?
Speaker: James Simpson
Yeah, I think a really great first step was that we had a 20% discount and we still do I think for a few more months on M-stable users covering their positions on InsurAce.io. I think that the way it works in this partnership is that users can rebate in the insurer token and that’s I think a really fantastic way to adopt usage and DeFi as we know. I think longer term if we move away from token incentives for a moment, I think making it really seamless from the front end in M-stable to buy cover on the position for users on our app I think would be a really great next step. I’d be excited to kind of even take some of the API that a user is earning and redirect that to insurers buy cover and use it doesn’t really feel like they’re paying for an insurance. It just kind of shows them what their API which should still be healthy if it continues to be as high as it has been but they’ve just clicked the button and got cover. So, I think both usability things could be long term.
Speaker: Dan Thomson
Definitely! I mean we’ve seen great uplift in other protocols that have a very simple one click functionality but what you’re talking about is essentially a zero click functionality which I think Oliver can explain more with the release of an API we’ve got coming up soon. We hope to actually be able to integrate that sort of service. Oliver can give a few more details, I guess.
Speaker: Oliver Xie
Yeah, sure. I think James just talked about the integration right with our insurance services. So that’s something we’re currently developing. We are developing a full set of API’s so that what we call it as insurance as a service so that other DeFi protocols can just use that API to integrate and call our insurance services. So, I think that can create a very sweet spot so that we can integrate with M-stable on the smart contract level. So, let’s say when the users are using a savings function right, in due course, we can have a tick box there if they want to get covered. Then if you tick that box, we can automatically give you a premium and then all these done in one transaction which will also see I mean Gatsby(11:54) as well.
So this is definitely something we are doing in the past few weeks and that is expected to come out in the upcoming I think two or three weeks. And we’re also putting a lot of security measures into this whole process because interoperability is one of the best parts of defy but it’s also one of the most fragile part. A lot of the defy security events come from interoperability so that’s something very handy as well. So, another part of the API we’re developing is an UI based API.
So, we are targeting to use that as a kind of referral program so that we will generate a referral link for other websites for other like influencers to use. So, every time when people click that referral link it will automatically redirect it to our site and people can just buy insurance in one shot. (12:54)
So overall, I think the smart contract level of API is something that we are developing and we hope to integrate with M-stable and James hope you can support us as a sick(13:07) user for that function. I think both teams can work on that while our API is ready.
Speaker: Dan Thomson
Yeah, that’s great. And yeah, I guess M-stable is a fantastic example for us to use because since we already work with the M USD token, we can hopefully easily integrate sort of the rewards and benefits back into the InsurAce.io to IO platform as well. So, it seems like there’s a really nice synergy there coming up and I’m excited if we can get more M-stable users over and everyone’s own rewards everywhere then we’re all winning and if it makes everything safe, we get some big institutions coming in even better. So, I guess that’s sort of the next big milestone for InsurAce.io to IO. How about you James, what’s coming up next?
Speaker: James Simpson
Yeah, thanks. So, M-stable is building out a kind of suite of stable coin products. We want people to come to M-stable and see it as the home of stable coins where you come to swap, save, leverage and kind of potentially even insure through InsurAce.io your stable coins. And so, for us, there are a few key things that are coming up in our roadmap of note(14:33) where a few meetings coming up. One is a kind of stake D(14:41) composite m asset that we’re really excited about and I think insurance for this product would be particularly interesting.
There are a lot of liquid staking solutions. We’ve seen some hacks recently in them. So, we’re interested in creating a meta asset for that. Would be interested to discuss how we can ensure that product if we can create kind of an average yield liquid staking meta asset that’s insured. I think there would be a definite market for that. And we’ve also looking at how we can create kind of less collateralized stable coin borrowing product. So it’s not we’re not sure if it’s going to be under collateralized yet but certainly more capital efficient than current solutions. So that’s the kind of another product we’re working on in the background. But yeah, we’re looking forward to kind of deepening our relationship with InsurAce.io as we roll out these releases.
Speaker: Dan Thomson
Fantastic. Super exciting times and yeah, I mean definitely, we’ll be looking at helping to insure those assets as well. Okay, I guess the biggest question and my favorite one for most people is what are your current challenges you’re facing in the DeFi space at the moment? Obviously, the market is having a bit of a wobble, everyone’s well Gemini investors are playing it easy and cool. There’s positive news, there’s negative news, it’s a bit unstable and I’m very confident in saying we’re both projects that are just continuing to just bury our heads and just keep building, keep focused on the future. But obviously, there are still obstacles and things to overcome. So, I guess Oliver, we’ll start with you. What’s the biggest challenge for us right now?
Speaker: Oliver Xie
Yeah, I think the biggest challenge for us on one hand is the market condition right now. You see the market or I think the market sentiment is kind of weak. A lot of the tokens are dropping and the mainboard tokens are also dropping. So that actually creates some kind of pessimistic sentiment in the market. However, as Dan just mentioned, I think that creates some pressure for project teams but it’s also stake D good correction that a very good time for us to just keep our heads down and focus on building. Yeah, so hopefully, when the market gets back and we can get a strong reports(17:11) as well.
I think on the other hand, in terms of the product or the marketing, I think just because the market is getting paid of Chinese. So I think building traction is even harder for DeFi projects right. I think the message back June when the market is overall in a bull cycle and everyone is super excited about what’s happening in a closed space. But currently, I think a lot of people left the space but that action creates some challenges for DeFi projects to build up the attraction. But I think overall, as long as we keep building I think things will work up.
Speaker: Dan Thomson
Yeah, definitely. James.
Speaker: James Simpson
Yeah, I think obviously, markets are emotional on the way up and the way down or even when they’re flat. But I kind of see it as we are all startups but a lot of these startups have their tokens or kind of equity like things trading from a very early stage and that’s pretty unhealthy for a lot of teams to concentrate on because we’re still kind of in the process of building our core product and our core user base. I think if you just zoom out, we’re offering a savings account on eath atlases(18:51) is offering 12.9% APY on US dollars that’s insured. So, compare that product to what you get in the bank account, it’s pretty dang good and that’s now.
So, I think in terms of the actual product that we’re creating, nothing’s changed. So, I hope that people see that and keep using our products. And I think at some point the market will go up once those users come in.
Speaker: Dan Thomson
Yeah, I completely agree. And I think that this is the right time when people are a bit sort of nervous about certain other crypto assets but to have those sorts of stable assets there that they can then have gaining a return on and also have it protected and insured is great in current market conditions. I think we’ll see a lot more people using it as a sort of mitigation against market volatility going forward instead
of just switching over to tether and waiting for example. I think having actual these options these DeFi options there in the meantime are great and if the whole market sort of even shifts in that direction, it’s great as well. It moves away from traditional finance and keeps it in your own one at the end of the day. So I mean it’s a really interesting space. It’s going to be super fascinating what happens the next sort of six months which whatever happens with the market, I know we’re both developing and both building some really great products. Do we have any sort of final thoughts anything else you’d like to add at this point?
Speaker: Oliver Xie
Yeah, I heard that James, you’re in Paris at the ECC right?
Speaker: James Simpson
Yeah, I’m currently in Paris at the ECC conference. So, I just stepped out of the conference and the meetings back to the apartment. It’s quite a hot day here in Paris but so good to see the theorem community together and yeah, it’s definitely alive and kicking and nobody’s talking about the price really, actually. Everyone’s just talking about collaborating and their products their building and it’s a really great environment. And yeah, I mean to close off, I think I just want to thank the InsurAce.io community for working with M-stable. I know our community are really excited about the partnership and look forward to continuing working together.
Speaker: Oliver Xie
Yeah, sure. I think it (21:28) to get more collaborations with M-stable and M-stable community. And .(21:36) I think let’s just get this moving forward and once our API is done, I think we can see some even greater collaborations here.
Speaker: James Simpson
Yeah, we should also mention that the person who brought us together was Defiance capital which is a mutual investor of ours and I think that it’s an example of investors actually being very valuable. So, yeah, we should thank Eugene(22:09) from Defiance capital as well.
was, I think we just made up
also, Scimitar, which will support up though
Speaker: Dan Thomson
Yeah, definitely. Thank Defiance capital. You guys are brilliant. Alright guys, thank you so much for your time. I’m going to include links to both projects when we get this video description uploaded with the transcription coming up following that for a nice long blog post. If anyone who’s watching the video has any comments or questions, please do leave them under the video and we will get back to them as soon as possible. But guys, thanks so much for your time and yeah, looking forward to it. Sounds like a really bright future.
About mStable?
mStable is an autonomous and non-custodial infrastructure for pegged-value crypto assets.
It is built on Ethereum and Polygon. mStable assets (mAssets) are built to an autonomous and non-custodial pegged asset layer for Decentralised Finance (DeFi).
mStable was created to address three major problems that confront pegged crypto asset users:
- significant fragmentation in same-peg crypto assets (there are currently over 5 major USD pegged crypto assets on Ethereum for example)
- lack of yield in fiat currencies and pegged crypto assets
- lack of protection against permanent capital loss in pegged crypto assets
mAssets represent some underlying value peg and are minted/redeemed on-chain via smart contracts.
A user minting an mAsset interacts only with the mStable contracts, which are non-custodial. This means that no third party ever takes custody of a user’s assets. In other words, mStable is a “peer to pool” protocol, where the pool “lives” in a non-custodial smart contract.
mAssets are fully backed by a basket of existing tokenised same-base assets (hereafter bAssets).
Each mAsset represents a share of liquidity in that mAsset’s pool as well as a pegged crypto asset in its own right. A mAsset can be used as a medium of exchange, unit of account and store of value.
About InsurAce.io
InsurAce.io Protocol is a DeFi Insurance protocol that has quickly become the second-largest protocol in DeFi insurance. The INSUR token was released in February 2021 and has a circulating supply of 11 million INSUR tokens. There is a maximum release of 100 million INSUR Tokens which can be mined through staking on the protocol.
InsurAce.io is a decentralized insurance protocol, to empower the risk protection infrastructure for the DeFi community. InsurAce.io offers portfolio-based insurance products with optimized pricing models to substantially lower the cost; launches insurance investment functions with SCR mining programs to create sustainable returns for the participants, and provide coverage for cross-chain DeFi projects to benefit the whole ecosystem.
InsurAce.io is backed by DeFiance Capital, Parafi Capital, Alameda Research, Hashkey group, Huobi DeFiLabs, Hashed, IOSG, Signum Capital and a dozen of other top funds.
The project lead for InsurAce is Oliver Xie. Oliver started to work on InsurAce project since September 2020, and prior to that he entered the crypto space back in 2017 where he led a team to research crypto derivatives and blockchain technology and has gravitated towards blockchain-based Open Finance for the past few years.
For press enquiries and assets please contact: dan@insurace.io
InsurAce.io community:
Email: contact@insurace.io
Telegram: https://t.me/insurace_protocol
Discord: https://discord.com/invite/vCZMjuH69F
Twitter: https://twitter.com/insur_ace
Forum: http://forum.insurace.io
