Here are a list of 100 questions and answers that have been asked across our telegram (t.me/insurace_protocol), and our Discord channel over the last few months. These are specifically questions that have been responded to by Oliver Xie, founder of InsurAce.
Q: Can you make a brief introduction of yourself and also the core team members of InsurAce so that the community can know you and them better?
A: Dear folks, this is Oliver, I’m the founder of InsurAce.
Many of you have probably seen me often appeared here, on discord and/or forum to reply to your questions, but this is the first time we hold such formal AMA in our telegram group. I would like to take this opportunity to thank everyone who supported InsurAce along the way, and look forward to more.
Feel free to ask me anything in this session and afterwards, let’s shape up to a productive community. I started to work on InsurAce project since Sept. 2020, and prior to that. I entered the crypto space back to 2017 where I led a team to research cryptos and blockchain, and gravitated towards the blockchain-based Open Finance for the past few years.
The initiation of InsurAce, the DeFi insurance 2.0 Platform, is to build a reliable, robust and carefree insurance protocol, accessible for all DeFi users. It gives me the chance to combine both my professional expertise and my personal passion perfectly.
# DeFi is my passion, and InsurAce is my mission.
Although I’m the Founder and project lead of InsurAce, my role in InsurAce is more like a coordinator to assemble the suitable team members in order to deliver the best project.
We have a very professional team composed of tech savvy, the most experienced insurance experts, the tier-1 legal & compliance veteran as advisors, the top-notch cyber security experts as advisors and the professional marketing team onboard for this exciting journey. You can find more about the details abt the team on our website and media.
Besides daily management as the founder, I myself is also a coder too, so I work with my developer team shoulder by shoulder on the product delivery.
Q: Can you share a little bit of what InsurAce has achieved in 2020 and what exciting milestones are to be delivered in 2021?
A: It’s March 2021 now, how time flies. 2020 is a fruitful year for InsurAce, we started the journey of InsurAce and made some exciting progress, to list a few:
-> assembled the InsurAce founding team and kicked off the project.
-> product design and development was successful and recognized by many DeFi savvy users.
-> completed the Seed round investment supported top VCs such as DeFiance, ParaFi, Huobi DeFi labs, Hashed, Signum etc;
-> onboarded top advisors to administer compliance and cyber security of the platform;
-> built up our community and pr channels.
In 2021, we’ll not stop, some of the things that we have done and plan to do are:
* completed development of our v1.0, and deployed to testnet for public testing;
* closed our strategic round funding and got more support from investors and community.
* initial launch launch via Balancer LBP comes tomorrow;
* plan to launch the platform to Ethereum mainnet by end of this month, and continue to develop more features, support more protocols. (we’ve a list of new features in our pipeline).
* migration to other chains such as BSC as our key next step.
* more efforts into business development and user acquisition.
Q: Speaking of investment, one quick question: can you introduce more on the two rounds? Like what do the investors see in InsurAce?
A: oh, yes. thanks. We do have a strong investor lineup as well.
In our seed round, we got the support from DeFiance, ParaFi, Huobi DeFi Labs, #Hashed, Signum and LuneX, all superb, supporting us all the way here.
In our strategic round closed recently, we got the support from Alameda, Hashkey, and the seed round investors above followed up with stakes, together with a few other notable funds such as IOSG, OKEx Dream Fund, ImToken Ventures, LongHash Ventures, etc.. There’re also quite a few ecosystem partners, KOLs, angel investors, and community leaders joined as well.
Q: What made you decide to build such a project InsurAce? What potential do you see in DeFi insurance?
A: to put simple => counter the cyber security risk, as one of my best friend was the victim of DeFi hacks, which was the original driver of building InsurAce.
DeFi landscape continues its rapid growth and market demands have been increasing exponentially. According to DeFiPulse, as of today, DeFi TLV reached an all-time high of 47.73 Billion in USD.
However, the industry has been witnessing challenges and threats posed by hacking, code flaws, oracle manipulation etc, causing huge losses of user assets.
Actually, just a few days back, another hack happened, refer to this twitter => https://twitter.com/FrankResearcher/status/1371039891837104129?s=20
Needless to say, the cyber-attacks have been posing significant threats to the whole DeFi ecosystem fundamentally. Besides the technical approaches to resolve this problem, insurance, by its nature, has been another effective means to manage this risk.
Q: Hacking is the biggest threat to DeFi. Everyone can feel it.
A: However, the existing insurance solutions have their existing issues which we think can be improved a lot. therefore, we started InsurAce to build a more better DeFi insurance protocol.
As in terms of the potential DeFi insurance vertical, i think it’s still huge.
(over all TVL covered by insurance is less than 2%, and 8%-10% or even higher is something rational).
We see DeFi Insurance still in its early-stage of development. Top insurance projects like Nexus Mutual still have relatively limited coverage and the maximum capital of the covers has not exceeded 2Billion, which only takes up less than 2% of the whole DeFi market.
I’ve talked to many crypto folks about this, basically we all agree that 8%-10% is a reasonable percentage to be covered against the TVL.
Therefore, we foresee there’s still huge potential for DeFi insurance protocols on the demand side , and that’s where we come about on this.
On the other hand, in terms of the valuation of all DeFi insurance protocols, they’re heavily undervalued.
The overall valuation of DeFi insurances is even smaller than uniswap. but just think about the size of the largest insurance company vs the largest exchange. You’ll know what i mean.
One more thing, DeFi insurance is an vertical where projects can build up user loyalty and brand awareness, compared to other areas like lending and borrowing, DEX, where liquidity and APY rules everything.
Overall, i think DeFi insurance is still at its early stage, and huge potential to be unlocked!
Q: What are the challenges of existing DeFi insurance protocols? What are the outstanding advantages of InsurAce compared to other insurance projects such as Nexus Mutual, Cover, ArmorFi …?
A: We respect all the other insurance protocols, and we’re building up this ecosystem together. Nevetheless, we do see some setbacks for existing solutions.
Speaking of the challenges of existing DeFi insurance protocols, basically we’ll refer to 2 major protocols, Nexus Mutual (nxm) and COVER, but COVER unfortunately suffered from a hack in last Dec (and Andre just tweeted a few days back, you know what i mean), so i guess it will take quite some time for them to recover, but anyway, that doesn’t affect us to ttake it as a good case study.
NXM is built as an mutual insurance, whereas COVER is a peer-to-peer model, quite different, but some of the issues / problems for them are, as per our extensive research.
1. Product Accessibility => such as high premium (the premium on COVER is 20% annually at its minimum, and on nexus mutual, it could be as high as 70% too), KYC-based membership (specifically to nexus mutual) which poses lots of restrictions to users, lack of support for new DeFi protocols which are actually the ones that need to be covered most, lack of risk diversity to cover other potential types of risks.
2. Capacity Issue => on nxm, the capacity is a big problem as it’s highly relying on staking but the staking rewards is quite low (1% annually, can you imagine that? ), so sometimes when you wanna to buy insurance there, it just doesn’t have the capacity.
3. Capital Inefficiency => Insurance, similar as any other financial product, the capital efficiency is one of the core considerations. The capital injected into the insurance platform is often not well managed, leading to the low utilization of the reserved fund which can be employed in a more delicate way. Meanwhile, per our experience in the traditional insurance industry, customers are always expecting to gain sustainable investment return on the money they place into the insurance company, therefore, investment is also important for users, not just for the short term (staking rewards by tokens might be very high), but also for the long run (after the mining is done, investment yields will be become the main sources of user returns).
4. Risk Mangement => As mentioned above, insurance, by its essence, is a tool to help people manage their risks, therefore, the risk management of the insurance business per se, is even more critical. However, the risk management for existing insurance products still need to be enhanced. Let me give you a few examples:
+cyber security risk -> what if the protocol itself got hacked? => cover is a bloody example.
+concentration risk -> will the coverages be concentrated on a few protocols only?
+claim assessment -> how to ensure a rational and impartial claim process? => nxm is solely dependent on community voting, and only claim 3 cases in the past 2 years.
+operational / credit risk -> how to ensure the operations of the platform are well managed?
insurances are designed to protect people, it should be built and run in the hands of the right team and community.
As an insurance protocol, InsurAce will provide two function arms similar as the traditional insurance company, i.e., the insurance arm and investment arm.
While insurance capabilities are our cornerstone, the investment is also an essential component to enhance the business.
The free capital in the insurance capital pool can be placed into the investment pool to gain higher yield, while the insurance arm will provide protection to the investment activities. Meanwhile, the yield at the investment side will in turn complement the premium at the insurance side, and further reduce the cover cost for customers. These two parts will in such a synergetic manner provide “0” premium insurance as well as considerable investment return, forming a sustainable business model.
In this model, InsurAce as a platform, will generate revenues from the insurance premium as well as a minor portion of carry from the investment returns. Those revenues will be used in areas such as operation / development costs, tokens buybacks, community incentives, ecosystem collaborations and etc.
In this picture, you will see the product design and functioning mechanism of InsurAce which combines Insurance & Investment services for users to enjoy higher profits by improving capital efficiency.
As for our insurance component, the “portfolio-based” insurance is our unique offering in the market.
Q: About portfolio based insurance, can u elaborate on that? Many people might not understand it fully.
A: That’s the core feature we can offer compared to any other defi insurance protocol.
Let’s say you’re farming on 10 different protocols, and you wanna to cover them. on other insurance platform, you’ll need to buy 10 times, cost you 10 times of gas fee, 10x of time and overall premium is much higher.
Q: What is the end goal for InsurAce — do you want to compete with the giants like Allianz? Or be a bridge between insurance and cryptocurrencies with coverage provided for Defi insurance?
A: Well, I wouldn’t say we’re going to compete with those traditional giants at this time of the project, but I guess the trend for crypto and blockchain to reshape the industry has started, and it’s going stronger and stronger. Just take a look at how internet reshaped the whole financial industry.
Meanwhile, I would say that we are not pure competitors of the traditional giants, but also their collaborators. We can be a healthy supplementary role to the insurance landscape, whereas they can provide us support as well. Actually, we have talked with a few traditional insurance giants on providing insurance to us, which will benefit the whole DeFi space.
Q: Can you share the INSUR token use cases and incentive mechanism? We know that InsurAce will be holding Initial Token Launch via Balancer LBP, what can we expect?
A: The INSUR token is the governance token of InsurAce, ERC20 standard, and it can be used in below scenarios:
-> Mining incentives for capital provisions to the insurance pool and investment products;
-> Representation of voting rights in community governance scenarios such claim assessment, proposal voting and etc.;
-> Eligible for fees generated by InsurAce protocol through governance participation;
-> Community incentives;
With the continuous growth of InsurAce’s user base and development of our ecosystem, we will seeing more values added to INSUR token as the basis of powering the whole system.
we will be holding our Initial Token Launch via Balancer LBP whcih starts at 22:00 SGT tomorrow and will last for 48 hours.
The reason that we do the Initial Token Launch via Balancer LBP, is that we have seen many projects do token launch in diffent models, but balancer LBP is a good way to help create an equal and fair launch as well as achieve price discovery to the INSUR token. It also helps to prevent front-running and speculation of normal auctions.
More details you can check: https://medium.com/insurace/insurace-initial-token-launch-ea7ac31cc3c1
Team and I will be happy to answer questions regarding the LBP event in our TG group. feel free to reach out, or DM me.
Q. How can you prevent scammers from gaining fake reputation by successfully executing and delivering on agreements using multiple fake accounts and to improve their vouch scores to scam others? Do you foresee this as an issue on your platform?
A: Good question, this could happen, that’s why we’ve an advisory board in our claim process consisting of experts from technology, insurance, legal, auditing firms and community to investigate into the case first. If it is deemed as a hack event falling into our claim scope, the advisory board will write this into their reference report to community to facilitate the voting.
I’m not saying we can prevent this 100%, but we’re doing with best effort.
Q: Among your distinctive features, you say that it is possible to get the premium at a discount with the InsurAce Token (INSUR). So, how does this work, how many tokens do I need to have to get a 10% discount for example?
A: what we do is that we’ll have a cover mining program, meaning that once you buy covers, you’ll get INSUR token as rewards, which will be proportional to the premium you paid, and the details will be announced prior to launching on mainnet.
Q: While you build your project, do you take into account community feedbacks and demands?
A: That’s for sure, we’ve talked with many community members, and savvy DeFi users, also investors, etc.., take their feedback, cherry pick and build into our product. Actually, recently when we launch our product to testnet, we also launched the feedback and reward program together. For those who tested and feedback, will get airdrop after TGE.
Q: InsuAce Protocol successfully raised $3M from private sale. So, what will be the next plan? Will you directly listed on exchange or run a public sale?
A: We ran a public sale (token initial launch) on balancer LBP, that started at UTC 14:00 (SGT 22:00 ) 15 Mar 2021.
Q: What do you think about the boom of the NFT + DeFi association that is causing so much interest in the world ? How does InsurAce Protocol take advantage of and exploit this reality ?
A: NFT is in the spotlight these days, you’ll constantly see news about this painting sell a few millions, Jack Dorsey’s twitter NFT is worth quite some bucks, NBA top shot sold a lot of bucks, etc. or a gaming company is using NFT. Personally I’m not very into that field since all most all of my energy are spent on the InsurAce Project, which is my passion, also my mission.
In general, I think NFT is a digital representation of ownership of unique assets off the chain, but their ownership is tracked and maintained on the chain, which can be fragmented, and easily traded, and we have seen some projects are starting to combine with NFT apart from arts and gaming. And I believe NFT has the potential to unlock more use cases.
As for insurances, we’ve discussed about this internally a few days back. I think there’re a few angles InsurAce can combine with NFT. i) provide coverages to NFT market, whereas the NFT itself, is hard to cover, I think prediction market is a more suitable model to do this. ii) we can make the cover as NFTs, which can be transferred of owership, and traded. That’s not something new in the traditntal insurance market.
Q: How is INSUR uses for? How to keep motivation of holding INSUR in the long term?
A: yes, as i’ve just introduced, there’re a few use scenarios for INSUR, but to the long term, INSUR has its value capture.
In which INSUR TOKEN holders will be eligible for claims to the fees generated by the protocol.
Q: I noticed that you have an actuary on your leadership team. How important is the role of actuarial in what you are building? Do you anticipate adding more actuaries to the team in the future?
A: Yes, we’ve a very experienced actuary in our team, building up all those actuarial, risk management, capital management models, definitely massive to the team. With the growth of InsurAce, we’ll need more such experts to join us, but we would mostly welcome community members who have such expertise to work together as well.
Q: Is InsurAce capable of Crosschain insurance? If yes How many chain it will support?
A: yes, that’s in our pipeline. As long as we have the capital pool in place, we can provide protections to a wide range or risks theoretically.
Q: What are the assurance that InsurAce company will not close? How much fee you will collect from every insured tokens?
A: We’ve adopted Solvency II (a capital management rule widely used in EU), in which we’ll use SCR (solvency capital requirement) as our capital management standard. For SCR, it requires us to reserve enough capital to last for at least 12 months on a 99.95% confidence interval. so i should say, we’re quite safe on capital management. we won’t charge fees from the INSUR tokens.
Q: Is this project a Global project ? Can local communities partake in it ?
A: yes, it’s a global project, but we welcome communities from anywhere of the world to participate.
Q: What are your top 3 priorities in 2021? Could you share some plans for the upcoming year?
A: top 3 priorities?
security, security, and security.
Q: I am an EXPERIENCED DEVELOPER AND ETHICAL HACKER, do you have plans for HACKATHON so as to check the security of your ecosystem periodically and also invite developers to build?
A: Thanks, we’ll launch a bug bounty program soon, prior to our mainnet launch. please stay tuned, thanks.
Q: Q. What plans does InsurAce have for the crypto market? And what stage is the project in the market right now?
A: to provide coverage for the DeFi protocols, the project is heading to balancer LBP tomorrow, and prepare for mainnet launch.
Q: Until what corner of the world do you plan to arrive? that is, to what extent in the world do you think INSURACE PROTOCOL will be solving people’s problems with their infrastructure?
A: I wouldn’t say we’ll solve everyone’s problems in their lives, instead, we are just trying to make the DeFi a safer place.
Q: There are some rivals in the insurance DeFi area as we already know InsuredFin, PolkaBridge and Bridge Mutual. What do you think this sub-ecosystem has market cap in total? Insurance is an issue mainly companies and even people do not consider at first step. How will you convince DeFi companies for insurance solutions?
A: yes, there are indeed a lot of projects on insurance vertical, and we welcome it.
we have our own competitive advantages, and we would like to play our part in the market. We’re building up the project on a solid ground base, and soon more will be seeing the value of this project.
Q: You guys raised 1M in seed and 3M in private? Acc. to my calculations, that roughly translates to 0.093$ per token for the amount of tokens in seed round and <0.4$ for strategic round. Is that true?
A: You calculations are mostly right, the private sale price, as i’ve already explained previously here, is around 0.5$, which is on the low end of the LBP program, so still consistent and reasonable. Definitely we can use other ways, not the balancer LBP, which is a reverse auction starting from 4.5, instead, we could use a normal auction starting from 0.5, and all the way up, but it will cause heavy frontrunning, which will harm more token buyers.
At the start.of a project, same as the start of any other startup, the early days are always the most difficult and challenging where you need support from investors. So we’re grateful for those investors who support us from the very beginning when we only have an idea and several people. As a return, their sale price is relatively low, but they also get 2years of lock up and vesting, which still makes sense, right?
Q: Also, Why are you guys unlocking 5% team tokens in the TGE? Is the team not bullish on its own project? I’ve not seen any other team do this. You guys have already raised enough to run for a few years. Why need tokens? That diminishes investor confidence, at least for me personally
A: As for the team unlock, it’s mainly for governance purposes, the team also needs some tokens in hands to handle the governance scenarios, right? otherwise, if the team has no tokens, how can we bootstrap the protocol?
Also, regarding the funds, you would probably need to check out how high the cost is to build, run and maintain a decent DeFi project these days, especially considering the complexity and workload of insurance projects.
And pay attention, we’re only unlocking 5%, and we won’t sell it. probably you should check out more projects. If it doesn’t make sense, the seed / private investors would already deny it from the very beginning, right?
Q: It’s possible to participate in governance using locked tokens though? Even if we suppose the team won’t dump, some advisors are gonna dump for sure.
A: well, you do have a point here, however in InsurAce protocol, the governance scenario is not just for proposal voting, but also including scenarios such as voting on claims which requires staking of INSUR tokens in advance, it doesn’t accept locked tokens at the moment, which again need bootstrapping at the early stage as well.
Q: Also, imo, the starting price of LBP is too high imo. As you should already know that the MM/bots already pumped the supposed tops of all recent LBPs to new highs. That’s how all the LBPs are working currently.
A: That’s not all true mate, if you take a look at the most 2 recent projects, SIREN and KINE, their lbp prices are quite normal I would say. As said, there’s no perfect solution for a fair and equal launch, but we’re choosing this on a best effort basis. If you use another method, ppl might probably complain abt front running already.
As for the starting price, we’re setting at a very reasonable range, you may check the valuation of these different insurance projects ( refer to below pic). $4.5 is totally within the proper range as a START (please bear in mind this is a reverse auction, if nobody come to buy, the price will drop from 4.5$ to 0.5$), especially if you take a deeper look at the products of some of those existing projects and their market cap, you will know what i mean, and you will find that InsurAce is actually doing things on a solid ground base. By saying so, we’re just trying to make a fair play here and doing things in the long run.
Q:Are there so many Chinese leeks?!
A: I wouldn’t think in that way, they’re our valued users, and we welcome people to use our services globally, which eventually will benefit our token holders.
Q: Can you briefly introduce your product’s ecology?
A: well mate, to put it simple, offer insurance services to the DeFi users who need it.
Q: Given the current situation in the world, in theory, many large players need it.
A: i like the phrase, “in theory”, buddy, that’s exactly the case, and to put it in other words, it’s “potential”.
Q: The most important thing is safety!
A: exactly man, that aligns with our philosophy.
If the mission of insurance protocol is to safeguard others, the top priority is always to make sure the protocol itself doesn’t get rekt.
To build sound security, it requires lots of work, resources and time, that’s part of the reason why we are not hurrying to mainnet. (we’re liaising with Peck Shield on the 2nd round of auditing actually) We can’t afford the risk of launching on day one, and getting rekt on day two. The project will be ruined, and all our token holders will suffer.
Q: When are we going to go binance?
A: Hi mate, thanks for asking and I guess many community friends are also curious about this, so i’’d like to share some info and thoughts on this.
tbh, we’ve been in active talks with binance for funding and listing for some time. they do like our project, but they have their concerns, which is not over InsurAce per se, but over the whole insurance vertical. Reasons being that last year binance listed COVER Protocol (an insurance project), which got hacked in last December and binance spent a lot to compensate their users holding and/or trading COVER, which is a painful lesson for them. Therefore, they’re exercising extra caution over insurance projects no matter in investment or listing. Anyway, once bitten, twice shy, right? I’m not blaming but we’re kinda of paying the price for COVER’s faults, and this again highlights the importance of security, especially for insurance protocols.
However, that doesn’t mean that we don’t stand a chance to be listed there, we still do, but the road might be longer. our approach is more of product driven. we’ll launch our product to ethereum mainnet first, securely and stably with solid operation records. meanwhile, we’re also planning on migration to BSC which is our strategic move as next step. Actually this week i’m talking with pancake swap on launching a trading pair there as a start, followed by a 2nd deployment of InsurAce products on BSC (will take some time for bridging, testing, and front-end changes).
With these moves, we’ll prove that InsurAce is a trustworthy protocol with solid track records and traction, that $INSUR is a good asset, and our ties to BSC will bring us even closer to binance. Also, don’t forget that we have a strong investor roaster who are backing us on exchange listing, and i’m sure we will get there.
Q: Gate.io listing is not official, correct? You guys haven’t worked with them?
A: No, they’re not, they list us on their own, which we can hardly interfere with.
The only official listed CEX is huobi global, where DEX is on uniswap.
Q: Not migration as it will be staying on ETH as well lol, Multichain insurance
A: Yes, in theory, as long as we have a capital pool to underwrite the insurance risks regardless which chain it’s deployed on, we can insure assets anywhere. but there are a bunch of implementation and operation issues. so our idea here is to deploy and operate 2 instances separately on Ethereum and BSC in parallel, but the INSUR token is still one but bridged across the chains.
i understand that many ETH maxists love to stay on ETH and don’t wanna migrate to BSC, there’s been a lot of discussions on twitter abt this. I think it’s actually a tradeoff between user experience and eth tenets on whether to migrate to BSC or not.
Q: Do you have a plan in case of a bear cycle?
I understand that the team prefers to work calmly and prove it with deeds. But, unfortunately, projects that are in the shadows-it is more difficult for them to survive in the market. You need to pay attention to yourself in modern realities. Be visible.
The news about the launch of the main network should be very loud! You need to think about how to maximize the coverage of the news distribution.
When will there be a bug bounty? If the event has not yet been announced, then the launch of the main network is still very far away? Am I right?
A: thanks for the advice mate, you do have a point here, building traction is important for a crypto project and we’ve been working on that if you notice, we actually have seperated korea, arabic, and chinese community groups, and we’re working together with quite a few influencers and communities on building up project awareness. it’s just that the date of launching has not been finalized (pending on the audit report) and the details are not disclosed, so we didn’t sound out this officially, just share this around in our own community.
Bug bounty program is important, but don’t think it’s a dependency for mainnet launch. Actually our bug bounty program has been drafted back to a while ago, but it’s better be launched after the auditing is completed, otherwise there could be conflicts.
Q: I’m just sitting here waiting for gas to go down a bit so I can stack some more insur…..
A: sure man. we’re working on exploration of layer2 solutions (not very robust atm), and a BSC deployment. In this way, to further solve the pain of gas for our protocol.
Q: I was asking about the process for requesting covers. For me, specifically, I would be interested in Rari capital. they move coins between aave, mstable, compound, and one or two other big ones.
A: That’s a complicated scenario since there are a lot of cross protocol interactions. we need to clearly define what we’re covering.
Q: What is Rari capital? Yield aggregation? Are you interested in whether it is possible to take out insurance for Rari Capital?
A: Yeah, I’m not 100% certain about taking out insurance since I don’t know what it will cost, but I was wondering about the process for requesting it. it’s a yield aggregator. I’m in the stable and eth pool, if you are curious you can check it out.
what we can cover is typically the capital in the pool of a protocol per se, instead of the capital it moves around. let’s say if there’s loss caused on other protocols, but you as Rari’s user got suffered and got insured on InsurAce on Rari, it’s hard to justify whether that should be claimed or not.
Probably you can help to contact Rari protocol, we have a form for risk assessment normally provided to the project team. they can provide the required information, with which we can do the risk assessment on what we can do and the premium level.
i share it to you here: https://forms.office.com/r/TYRX2pvDPU
Q: What is the minimum stakeable number of INSUR token.
A: The lower limit for INSUR staking is set as 500INSUR.
The blog post is a good reference place. — -
https://medium.com/insurace/insurace-mainnet-launch-schedule-eb23fc5b207b
Q: Is there any audit report?
A: Sure, refer to this : https://insurace-protocol.gitbook.io/landing-page/documentation/security/slowmist-security-auditing-report
Q: When is the next private unlock
A: In late may, the 2nd batch of per-block vesting for investors will start.
Q: There is a Chinese community?
A: Yes, there is a chinese group on telegram, you can join there and find the admin who will guide you into the wechat group. https://t.me/insurace_chinese
A: Why don’t you make a Korean room?
A: Yes, there is a chinese group on telegram, you can join our Korea community:
https://t.me/insurace_protocol_korea
Q: 20% of premium pool would be tier 1 for claim and compensation, staking pool is tier 2; Then what is the capacity of premium pool
A: The size of the premium pool will depend on how much covers we can sell. Could be large, or could be small, depending on how the business is going, and the staking is the first step to bootstrap this process. Also, the 20% is just an initial parameter, we can decide this ratio via governance once our governance module is live. Community will have the call on this.
Q: The apr 30–50% is based on the suggestion that $insur 5 U, and 200M cap is full?
A: yes. that’s right. 20M actually. So the early stakers will definitely enjoy a much higher APY than 30% — 50%. this is just a range since it will be subject to the price change of INSUR token, and the size of the TVL.
Let’s assume for day 1, there’s only 1M staked in, then the APY will essentially be like 30–50% * 20 = 600% ~ 1000%.
That’s why the first movers into staking always get the most out of it.
Q: Will the amount of the covers you sold reflect the APR? is the premium pool the total amount of cover sold?
A: Yes, will have correlations in the long term once our insurance service is bootstrapped, but as of now, the APY is solely related to the INSUR token price, TVL, and per block reward emitted.
Q: Thanks — I had not seen that yet — very good explanations and like the use of Solvency II. So stakers are effectively like the old Lloyd’s market “Names” providing capital for underwriting insurance but without the unlimited liability ?
A: I would say it depends on how and when the stakers are staking. we’re adopting Solvency II as the capital model, so will always need to make sure we have sufficient capital reserved for the potential claim pay out, and APY can be a good tool to dynamically adjust the capital flow. Let’s say when the capital sufficiency is good enough, then APY will essentially be low, and will be high to attract more capital flow if the capital sufficiency is at stake, and vice versa.
It has similarities as Lloyd’s market “names’’ practice, however i wouldn’t say it’s “unlimited liability” in our model. There is a possibility that the stakers may lose all their staked assets under extreme cases, however chances of that are extremely low as well. Even if that happens, no extra liabilities will be able to impose upon the stakers in both theory and practice, which is different from the Lloyd practice of “unlimited liabilities’’. Therefore, our modle is mimicing the Lloyd model in some sense, but still has its uniqueness thereunder.
Q: Hi, how about apy, after I staking show another apy, and now show lower apy. So what’s apy for me?
A: The APY will change based on the amount staked into the pool and INSUR token price
Guys, the network is congested at the moment, so if you have issues, please be patient.
Q: Hi the only lock up atm is the withdraw 30 days lock ? and till main-net goes live there are no risks of having to pay for claims correct ?
A: Precisely, it should be before the insurance service is enabled, there’s no such risk.
Q: Meaning we can buy Insurance for USDt staked on Binance or blockfi or crypto.com right? If yes, may I know the premium
A: We haven’t listed the product for binance / blockfi / crypto.com yet, but we’ll provide them soon. The current premium for coverage on existing protocols are at 2%-3% on average, but if you buy as a portfolio, the overall premium will be even lower.
Q: We are looking for crypto staking that providing 8–12%, if insurable, then we may reallocate our reserve
Just now saw the premium 900 for 900k, I misunderstood that premium is 0.1% of coverage
A: What i mentioned is the annual premium level, but in our app, we can offer 1–365 days of cover period, which is flexible, then the premium level you saw there could be a mixture of different tenures.
Yes, if the staking apy is 8–12%, and the insurance is like 2% on average, that would pave the way to more attractive and trustworthy yields than TradFi. That’s why many funds from TradFi are looking at setting up DeFi funds, and we can fill the gap of insurance for them.
Q: How many weeks staking period ?
A: The staking for insurance is an ongoing staking, as long as you don’t unstake, it will always stay there in the pool and get the rewards. Unlike the staking programs on some other platforms that are phased, schedule-based staking lasting for a few weeks, our staking is ongoing and continuous.
Reasons being that the capital staked is used for insurance underwriting, therefore as long as there’s insurance, the staking stays.
Q: What’s the difference between lock up and staking
A: These are the key ideas for the staking, unstake, withdraw and reward distribution.
1. you can stake and unstake any time, but unstaked asset will be subject to a 30-day lock-up period, which is a common practice for insurance protocol to avoid liquidity risk, and this 30-day will be shorter once the liquidity is bootstrapped with more stakings and cover sales.
2. During the 30 day lockup period, you’ll still be entitled to the rewards.
3. The rewards (INSUR tokens) will be subject to a 15-day per-block vesting till fully withdraw-able.
Q: What are the plans for the big 3 cex UPbit,binance,bithumb 😢
A; We need patience we’re working on this, but may not be soon since korea regulations have changed a lot of changes recently.
Q: Yeah, check the linking to the contract, the current one is not real interactable
A: you’re right, that’s a proxy contract. we’ve used a lot of the proxy pattern in our smart contract programming, which is upgradable, and more secure. so that’s by our design and implementation.
As for the reward vesting, we haven’t started the vesting yet, since we haven’t enabled the insurance service (the insurance related smart contracts haven’t been enabled). You probably have noticed that there are different types of rewards under “My Reward”, including rewards from insurance, staking and claim assessment. So the reward vesting will start once the insurance starts.
As for the error, that message is returned from metamask, so it’s correct, but our error message here is not so friendly and obvious. The root cause of this issue is a little bit technical. i’m not sure if you have any technical background, but i’ll just share it here.
It’s caused by the byzantine failure which will happen when multiple transactions, in this case, it’s multiple staking requests made simultaneously and caused failures to the validation among different nodes. so it does happen occasionally.
when such things happen, your gas fee is already consumed, so you’ll suffer from this loss. and you’ll have to do it again.
Q: Please clarify do you mean 30 days + 30 days = 60 days? It’s not clear
A: nope, let me clarify => you can stake, and then unstake anytime, but after you unstake, your deposits will be subject to a 30-day lock-up period, by the end of which you’ll be able to withdraw your deposits.
during the 30 days, you’ll still be entitled to rewards.
Q: How many people in the team? Where is the team based? Smart contract audit done?
A: 8 full-time and a few advisors working in a team, and we are global.
audit done by SlowMist -> https://insurace-protocol.gitbook.io/landing-page/documentation/security/slowmist-security-auditing-report
Q: Sorry for asking many questions.. the tokens we earn by staking are paid daily? Do they have a lock up period (example on sushi you have 6 month lock up for 2/3 of the tokens and 1/3 immediately)?
A: The reward is paid at per-block level, but subject to a 15-day per-block vesting.
Q: Just had a read through, very interesting. Particularly the lower premium of cover. My understanding from the article is that this is because of lower gas fees, because you’re grouping cover of multiple tokens into a single transaction. But is the actual cost of cover lower or the same as NXM, and the cost difference is solely because of gas? Interested in this because if it’s gas only, this is less of a moat / competitive advantage. If there’s something that’s actually getting the premium lower… that would be super valuable
A: Yes, mate, you probably just noticed the low gas fee part, but more importantly, is the lower premium, which is brought by our unique portfolio-based pricing models and methodologies. that’s the core part of our design. basically, we’ll calculate the correlations among different protocols, and price as a whole, which will effectively reduce the premium due to the risk diversification effect.
With portfolio-based design, you can cover one or multiple protocols in one transaction, with lower premium, less gas fee, and save your operation time.
Q: Got it. Can you explain what you mean by “correlations”, presumably you mean at the technology level? I’m not technical at all lol
A: partially at technical level, also taken into other dimensions, such as the business type (e.glending protocols normally have higher correlations among them), chain types, code analysis (some code are forked from another), etc.. in this way, we’ll gauge the risk at a more delicate granularity. So with more detailed risk assessment, we’ll give more delicate pricing to the risk which reflected on the premium.
Q: When will I be able to get insurance for uniswap / Aave / maker etc.. ? Product already working now? Or in a few months only? It will cover which risk, only “smart contract hacking”? Or also “impermanent loss”? Or another kind of risk?
A: checkout here, you can already buy insurance for the protocols you mentioned: https://app.insurace.io/Staking/StakingPools
Q: I do really like this portfolio coverage idea, quite smart
A: apy is on the staking pools currently, so as a start, it’s pre-configured. Currently the avg apy is set at around 30–50% if the pool limit is hit. but with more insurance business get going, we’ll take premium sharing into consideration into the apy, plus some investment yields for the free capital.
pls find out more in our whitepaper if interested, or we can talk more in my AMA this Thursday.
Q: Please confirm you do not use the funds we stake to refund the customers who execute/use the insurance? Basically you don’t use our money to give to customers? I suppose the main risk of staking is smart contract hacking?
A: Yes, in scenarios where there’s insurance claims and pay out, we’ll use the premium pool as the 1st tranche for payout, but if that’s not sufficient, we’ll need to use the capital in the insurance pool as the 2nd tranche. That’s how the insurance protocol works. otherwise, no meaning for us to get user’s staking. So there’s a risk here for staking as I’ve reminded many places. welcome to stake and earn rewards, but remember that comes with a potential loss.
But I guess nothing is gained without any risk, right. ?
there’s actually a pop-up message “risk warning” when you enter our app, which is reminding such risk, alternatively pls find out more on this page => https://insurace-protocol.gitbook.io/landing-page/documentation/protocol-design/staking/risk-of-staking
Q: When I do staking it’s part of the “insurance pool” (2nd tranche) or 1st tranche ?
A: 2nd tranche, but you still have risk of losing your capital although the chances are low. but we think it’s better to let you know this in advance.
Q: Have you seen what Aave/eth staking does. It’s a kind of insurance fund with a “slash risk of 30%”.
I think that means each person staking 80 % Aave / 20 % eth can lost 30 %. Aave would use these 30 % in case of hacking I suppose. They have a 7 days lock up period.
The current stacking In % is fixed overtime? Or very high first week and diminish second week etc…?
A: yes, but not every protocol has such insurance setups like aave. and again, users are still subject to loss of funds in certain cases. As an insurance protocol, is more dedicated on provide various insurance products to various protocols under various scenarios.
I guess you mean apy, right? it’ll be a floating based on the size of the tvl and the token price of INSUR. it’ll be high for the early stakers, but kept at a competitive and reasonable (currently set at 30%-50%) level when the cap is hit.
Q: When APY will go down, It will go down for everyone even the early staker? Example now USDT staking is 150 %. When it goes down to 30 % it will be 30 % for me also as an early staker or I keep 150 %?
A: it will go down for everyone. that applies to everyone. early stakers get higher apy because the pool is small but the per block reward is fixed, so they enjoy a larger share of the reward, that’s why they got higher apy. but with more ppl staking, the pool size grows, their portion of rewards will be split.
Q: Are there any good Medium articles on the value proposition of the insurace Token? Or someone Kind enough to explain via DM 🙂
A: read this mate: https://insurace-protocol.gitbook.io/landing-page/documentation/token-distribution
Q: Hopefully not….. this is one reason I invested in this versus other insurance projects that require KyC, This and BMI
A: it’s a different concept.
No kyc is normal for defi, and we’ll follow that way as it is, and we’re already doing that way. The kyc/aml with Litentry we are talking about is how to get more customers to our platform via privacy-preserved (onchain identity) kyc, so that we can better identify the customer and offer better services. Users don’t need to go through the traditional type of kycs (fill in various forms, personal information), but instead, they can provide more information to the defi services in a secure way. Give you an example, now the premium for all users are the same. Let’s say if we can identify someone who has good credit scores on the chain, probably we can offer lower premium for him.
No KYC is a good character of DeFi, but it also has limitations that more data and information is not available. But if we can do it in a privacy preserved way, it will be good for the scalability of defi as well.
Also, no prob. DeFi is permissionless, but in other words, it has not unlocked the huge amount of information and data that accumulated in the years of financial services. Data such as credit score will be very valuable and helpful if they can be integrated with DeFi, but it must be used in a privacy-preserved manner, instead of the traditional ways. Otherwise, you can see that because of lacking such kyc or credit score, DeFi has to build the whole credit system on top of over-collateralization, and the full potential has not bee unleashed without the well use of existing data. DeFi is the future, but CeFi will not perish, ultimately, it should be a form of HyFi -> Hybrid Finance = DeFi + CeFi that should work best.
Q: Yes I understand. If look at it from the point of view of my current understanding, this cooperation will help to achieve a greater level of security. Because the user’s funds will be analyzed for sources of fraudulent income. Right?
A: that’s part of the use. they’re developing an open api service that can analyse the on-chain behaviours and thus create a profile of the wallet address, which we can reference.
Q: When removing liquidity from the staking pools during the 30 day lock period are you still initialled to the staking reward for the 30 days?
A: 1. you can stake and unstake any time, but unstaked asset will be subject to a 30-day lock-up period, which is a common practice for insurance protocol to avoid liquidity risk, and this 30-day will be shorter once the liquidity is bootstrapped with more stakings.
2. During the 30 day lockup period, you’ll still be entitled to the rewards.
3. The rewards (INSUR tokens) will be subject to a 15-day per-block vesting till fully withdraw-able.
Q: I saw that the Nexus Mutual also has a 30-day lock.
A: yes, it was 90-days lock previously, but they changed it to 30days back to weeks ago. and our initial thought was to make it 30 days, so should be a good tradeoff betwee risk and user experience.
Q: Can you share a little bit of what InsurAce has achieved in 2020 and what exciting milestones are to be delivered in 2021?
A: In year 2020, InsurAce started, some of the major events:
– assembled the InsurAce founding team and kicked off the project.
– product initial design and development was successful and recognized by many DeFi savvy users.
– completed the Seed round investment supported top VCs such as DeFiance, ParaFi, Huobi DeFi labs, Hashed, Signum etc;
– onboarded top advisors to administer compliance and cyber security of the platform;
– built up our community and PR channels.
Our efforts gradually pay off, for the past few months in 2021, the major milestones we’ve achieved:
– completed development of our v1.0 in Jan, and deployed to testnet for public testing in Feb;
– closed our strategic round funding and got more support from investors and community, such as Alameda and Hashkey in Feb;
– conducted successful token initial launch via Balancer LBP in March;
– listed on Huobi Global back to a few days ago on 1 April.
Going forward, the major events upcoming are:
– launch the platform to Ethereum mainnet, and continue to develop more features, support more protocols.
– migration to other chains such as HECO, Polkadot as our key next step.
– more efforts into partnerships development and user acquisition.
Q: why build this project? it has something to do with an accident.
A: Back the DeFi summer in 2020, i was doing mining with one friend, but unfortunately his protocol got hacked, and we got nowhere to seek for help or get compensated, which is the personal trigger why we wanna build something that can help others who migh have similar sufferings.
A: By looking deeper into the DeFi space and especially, the existing risk management solutions, including insurance, we found there’s actually huge space to work on.
A: DeFi landscape continues its rapid growth and market demands have been increasing exponentially. According to DeFiPulse, as of recent, DeFi TLV reached an all-time high of 47.73 Billion in USD.
However, the industry has been witnessing challenges and threats posed by hacking, code flaws, oracle manipulation etc, causing huge losses of user assets.
Needless to say, the cyber-attacks have been posing significant threats to the whole DeFi ecosystem fundamentally. Besides the technical approaches to resolve this problem, insurance, by its nature, has been another effective means to manage this risk.
However, the existing insurance solutions have their existing issues which we think can improve a lot. therefore, we started InsurAce to build a more better DeFi insurance protocol.
As in terms of the potential DeFi insurance vertical, i think it’s still huge although there’re already a few solutions in the market.
We see DeFi Insurance still in its early-stage of development. Top insurance projects like Nexus Mutual still have relatively limited coverage and the maximum capital of the covers has not exceeded 2Billion, which only takes up less than 2% of the whole DeFi market.
I’ve talked to many crypto folks about this, basically we all agree that 8%-10% is a reasonable percentage to be covered against the TVL. Therefore, we foresee there’s still huge potential for DeFi insurance protocols, and that’s where we come about on this.
on the other hand, the overall valuation of DeFi insurances is even smaller than uniswap. but just think, the size of the largest insurance company vs the largest exchange. You’ll know what i mean.
One more thing, DeFi insurance is an area where projects can build up user loyalty and brand awareness, compared to other areas like lending, DEX etc.
overall, huge potential, huge challenges as well.
Q: Exponential growth always attracts bad players and we need someone like InsurAce to provide cover for common users, What are the challenges of existing DeFi insurance protocols? What are the outstanding advantages of InsurAce compared to other insurance projects such as Nexus Mutual, Cover, ArmorFi …?
A: Thanks Jack, i’ll take that as a compliment, but we’re definitely working hard on that. Sure. First of all, we definitely respect other insurance players in this space, i think we can work together to build DeFi a better place for all. Therefore, the comparisons made here are solely at product level, doesn’t constitute any infringements to other players. Speaking of the challenges of existing DeFi insurance protocols, basically we’ll refer to 2 major protocols, Nexus Mutual (nxm) and COVER, but COVER unfortunately suffered from a hack in last Dec, so i guess it will take quite some time for them to recover, but anyway, that doesn’t affect us to respect and take it as a good case study. NXM is built as an mutual insurance, whereas COVER is a peer-to-peer model, quite different.
To be more specific, some of the restrictions for existing solutions are (mostly can be found in our whitepaper).
1. Product Accessibility => such as high premium (the premium on COVER is 20% annually at its minimum, and on nexus mutual, it could be as high as 70% too), KYC-based membership (specifically to nexus mutual) which poses lots of restrictions to users, lack of support for new DeFi protocols which are actually the ones that need to be covered most, lack of risk diversity to cover other potential types of risks.
2. Capacity Issue => on nxm, the capacity is a big problem as it’s highly relying on staking but the staking rewards is quite low (1% annually, can you imagine that? ), so sometimes when you wanna to buy insurance there, it just doesn’t have the capacity.
3. Capital Inefficiency => Insurance, similar as any other financial product, the capital efficiency is one of the core considerations. The capital injected into the insurance platform is often not well managed, leading to the low utilization of the reserved fund which can be employed in a more delicate way. Meanwhile, per our experience in the traditional insurance industry, customers are always expecting to gain sustainable investment return on the money they place into the insurance company, therefore, investment is also important for users, not just for the short term (staking rewards by tokens might be very high), but also for the long run (after the mining is done, investment yields will be become the main sources of user returns).
4. Risk Mangement => As mentioned above, insurance, by its essence, is a tool to help people manage their risks, therefore, the risk management of the insurance business per se, is even more critical. However, the risk management for existing insurance products still need to be enhanced. Let me give you a few examples:
+cyber security risk -> what if the protocol itself got hacked? => cover is a bloody example.
+concentration risk -> will the coverages be concentrated on a few protocols only?
+claim assessment -> how to ensure a rational and impartial claim process? => nxm is solely dependent on community voting, and only claim 3 cases in the past 2 years.
+operational / credit risk -> how to ensure the operations of the platform are well managed?
insurances are designed to protect people, it should be built and run in the hands of the right team and community.
Q: What is InsurAce’s business design? Can you introduce the mechanism?
A: As an insurance protocol, InsurAce will provide two function arms similar as the traditional insurance company, i.e., the insurance arm and investment arm.
While insurance capabilities are our cornerstone, the investment is also an essential component to enhance the business.
high-level business design; so basically, the 2 arms work in a synergy.
The free capital in the insurance capital pool can be placed into the investment pool to gain higher yield, while the insurance arm will provide protection to the investment activities. Meanwhile, the yield at the investment side will in turn complement the premium at the insurance side, and further reduce the cover cost for customers. These two parts will in such a synergetic manner to provide “0” premium insurance as well as considerable investment return, forming a sustainable business model.
In this model, InsurAce as a platform, will generate revenues from the insurance premium as well as a minor portion of carry from the investment returns. Those revenues will be used in areas such as operation / development costs, tokens buybacks, community incentives, ecosystem collaborations and etc.
Q: There are quite many alike products in the market now. Compared to the other insurance protocols, what advantages does InsurAce have?
A: Sure, i think we’ve covered some of this in previous question, so i’ll quickly summarize this in below pic:
A: To sum up, the core advantages are:
1. porfolio based coverage => cover one or multiple protocols in one transaction, save your cost, save your gas, and save your time.
2. investment functions => make better use of the funds, and help you earn more.
3. no KYC => accessible for more users.
4. enriched product line => more risk types to be covered. From a user’s perspective.
Q: What is the end goal for InsurAce — do you want to compete with the giants like Allianz? Or be a bridge between insurance and cryptocurrencies with coverage provided for Defi insurance?
A: Haha, I wouldn’t say we’re going to compete with those traditional giants at this time of the project, but I guess the trend for crypto and blockchain to reshape the industry has started, and it’s going stronger and stronger. Just take a look at how internet reshaped the whole financial industry, and Web3.0 is coming over while DeFi is the first stop. So, who knows?
meanwhile, I would say that we are not pure competitors of the traditional giants, but also their collaborators. We can be a healthy supplementary role to the insurance landscape, whereas they can provide us support as well. Actually, we have talked with a few traditional insurance giants on providing insurance to us, which will benefit the whole DeFi space.
Q: Can you share the INSUR token use cases and incentive mechanism? We know that InsurAce will be holding Intial Token Launch via Balancer LBP, what can we expect?
A: Sure. INSUR token is the governance token of InsurAce protocol, so it’s is supposed to be valueless.
By saying so, the current uses for the token are:
– Mining incentives for capital provisions to the insurance pool and investment products;
– Representation of voting rights in community governance scenarios such claim assessment, proposal voting and etc.;
– Community incentives;
With the continuous growth of InsurAce’s user base and development of our ecosystem, we will seeing more values added to INSUR token as the basis of powering the whole system, such as, the token holder will be — Eligible for fees generated by InsurAce protocol through governance participation, which can be a big value capture for the token.
Q: Yeild farming is a new trending so INSUR have any plan to yeild farming system development?
A:Yes, we’ll have that as well. Tere’ll be incentives (farming) for those who provide capital, buy coverages, and buy investment products.
Q: Since you provide portfolio based services so can one claim the covers if one losses a pkey or gets hacked ?
A: yes, you can request for claim if any one of the protocol in your potfolio is hacked.
Q: Can you explain as a side of investors why should we hold # INSUR coin? Which features/utilities make # INSUR ecosystem better?
A: build the project in a longer horizon, instead of short-term pumps and dumps. I believe that if the project is continously delivering values, the prices will be supported. Look at how Uni, Comp, Aave works, all prove this. This is my thoughts.
