For those who have missed our fantastic AMA with InsureDAO in our Discord yesterday, we have prepared you this recap to ensure you miss nothing important!
TL;DR version:
InsureDAO is a decentralized insurance protocol, allowing anyone to create an insurance pool easily to “cover every single risk in DeFi space”. It is aiming to cover as many DeFi protocols as possible by allowing anyone to create an insurance pool on InsureDAO.
On InsureDAO, there are insurance pools and users can be either a buyer or an underwriter through pools.
The liquidity deposited by underwriters will cover the funds for insurance buyers if there is an incident on the DeFi protocols.
There are mainly 4 differences between InsureDAO and existing insurance protocols.
1. Wider cover range 2. More options for different risk appetite 3. Higher return 4. Fair decision-making upon payout
Mainnet and Arbitrum will be live on 14th of February! Also, prior to the mainnnet launch, InsureDAO DeGenesis will start from 31st of January. Read more here!
Full version:
What is InsureDAO?
InsureDAO is a decentralized insurance protocol, allowing anyone to create an insurance pool easily to “Cover every single risk in DeFi space”.
InsureDAO provides an insurance builder kit and insurance market. Additionally, offering lending function to INSURE token stakers is provided. InsureDAO will be launched on Mainnet and Arbitrum in the middle of February.
Why is InsureDAO created?
As one may know, there have been lots of hackings occurred in DeFi space. But, more than 90% of loss due to hackings are actually not covered by existing insurance protocols since they only provide insurances for selected major protocols.
Hackings often occur on small and medium sized protocols. And that’s why buying demands for insurances have been small.
InsureDAO is aiming to cover as many DeFi protocols as possible by allowing anyone to create an insurance pool on InsureDAO.
How does InsureDAO cover the risk?
On InsureDAO, there are insurance pools and users can be either a buyer or an underwriter through pools.
The liquidity deposited by underwriters will cover the funds for insurance buyers if there is an incident on the DeFi protocols.
Underwriters will get insurance premiums from buyers, in return of providing liquidity into insurance pools!
What kind of insurance products does InsureDAO offer?
When it launched, insurance was only provided for the hacking of smart contracts.
Gradually, however, it is planned to expand the coverage like stablecoin de-peg insurance or other risks in the DeFi space.
How does InsureDAO calculate the premium?
As for the premium calculation, the insurance premium will be automatically determined by the un-utilization rate, so it means basically determined by demand and supply. For example, if there is more liquidity, the insurance premium will be lower and vice versa.
In addition, TVL size of a certain insurance poo will be consideredl, in order to avoid the high volatility of insurance premiums. So, if the TVL size is smaller than $1M in a certain insurance pool, the pricing curve would be flatter in that certain insurance pool.
How does InsureDAO make payout decisions?
There is a unique process of payout decision! The payout decision is delegated to a third party committee which is called ReportingDAO. ReportingDAO consists of security experts, such as Quantstamp. So, they decide whether to pay out and how much to pay out on each incident.
If you look at other DeFi insurance protocols, they actually let their token holders decide whether to pay or how much to payout. However, in most cases, token holders are underwriters at the same time. So we think they have incentive to reject those payout decisions.
What are the utilities of INSURE Tokens?
INSURE token is the governance token of InsureDAO.
By locking the INSURE token, the user can participate in the selection of the ReportingDAO and the decision-making process for the protocol. When users lock their INSURE, they will receive veINSURE which gives users boosting & voting power.
Other than that, a liquidity mining program for INSURE/ETH on Univ3 is being planned.
What additional functionality do you plan to add in the future?
Here’s the planning functionalities for the further development
- InsureDAO lending is under development.
- Insured aggregator, which enables DeFi users to deposit funds into DeFi protocols and buy insurance for the deposit at the same time.
- API enables other DeFi protocols to integrate InsureDAO function easily on their UI
- Automatic payment
- Utilizing Multi-currency for underwriting other than USDC
What exactly does your partnership with BoringDAO entail?
As the launch partner, an insurance pool for the BoringDAO will be created.
Insurance for BoringDAO will be available on InsureDAO. So, you can either become a buyer or seller of BoringDAO insurance on InsureDAO!
What are the backgrounds of the Founder/ Team?
InsureDAO founder, Kohshi is the inventor of ERC2615. Previously, he built Forecastory, a decentralised prediction market.
Daisuke previously founded Lifenet Insurance company listed on the Tokyo stock market. He has a lot of knowledge and experience in the insurance space.
Other members also have lots of experience in crypto space, like some worked at NFT market and some worked at VC.
what’s the difference between other insurance protocols?
There are mainly 4 differences between InsureDAO and existing insurance protocols.
1. Wider cover range — We allow anyone to create any insurance protocol, like a liquidity pool on Uniswap. Thus, we could cover more DeFi protocols than other insurance protocols.
2. More options for different risk appetite — Competitive insurance protocol integrates several protocols into one index pool. On the other hand, InsureDAO has two types of insurance pools: single pool and index pool.
So, underwriters can choose pools to deposit based on their risk appetite.
Single pool covers only one protocol. So, we give more choices to users. If any incident occurs, other protocols, your fund will not be affected by those as a hacking event.
As an Index pool, we combine those single pools into one index based on a certain theme. Underwriters are able to diversify their risk across those pools. They can also leverage their liquidity and they are earning from insurance selling
3. Higher return — Underwriters can get returns from InsureDAO investment other than insurance premium. Additionally, for the whitelist pool, underwriters will be rewarded with INSURE token.
4. Fair decision-making upon payout — We delegate ReportingDAO which is a third-party committee to decide whether to pay out and how much to payout.
Token Holders, decision-maker in most DeFi insurance, have incentive to reject payout since they are also underwriters for insurances in most cases.
So, our third-party committee would make a fairer decision.
When does InsureDAO aim to have its mainnet live?
Mainnet and Arbitrum will be live on 14th of February! Also, prior to the mainnnet launch, InsureDAO DeGenesis will start from 31st of January.
What is InsureDAO DeGenesis exactly?
The InsureDAO DeGenesis is the event to secure initial liquidity for InsureDAO Reserve Pool to allow underwriters to leverage their liquidity.
And this would be the first opportunity for users to get access to InsureDAO’s native token — INSURE.
You can read more details in this article!
and here’s TL;DR of the InsureDAO DeGenesis:
- 6,000,000 INSURE are available in the InsureDAO DeGenesis
- Everyone will be able to claim INSURE at the same final price between $0.275 and $0.55 per INSURE
- Final price will be determined by total commitments by participants, and is capped at $0.55 once total commitments reach $3.3M
- If total commitments surpass $3.3M (up to the max cap of $6.6M), a proportional swap/the special farming split is globally applied
- Everyone’s commitments qualify for the same relative split between INSURE swap and a period of the special farming in our InsureDAO Reserve Pool
- Individual ETH addresses have max cap of $1,000,000 in USDC (1USDC is regarded as $1)
- The InsureDAO DeGenesis will have a fourteen-day commitment period during 31st January — 13th February
- There is no grace period.
- Anyone can participate in the InsureDAO DeGenesis
- There is an additional bonus to specific DeFi users for 10% of the amount each participant purchased.
What is the condition of the Token Sale?
the above TL;DR would be the condition of the Token Sale! Adding to that, for the InsureDAO DeGenesis, we decide to qualify BoringDAO users retroactively for an additional bonus 10% of the amount in INSURE each participant purchased.
Who will be qualified users for the Token Sale bonus?
Other than BoringDAO users, here’s the qualified list:
- InsureDAO testnet participants (Submitted the testnet application)
- InsureDAO OG POAP holders
- Tokemak users (TOKE stake, TOKE/ETH uniLP stake, TOKE/ETH SLP stake on official site)
- New Order users (NEWO stake, NEWO/USDC SLP stake on official site)
- Redacted users ( BTRFLY stake)
- Olympus users (OHM stake)
- Curve users (CRV lock)
- Convex users (CVX lock)
- Frax users (FXS lock)
- DFX users (DFX/WETH SLP stake on official site)
- Lixir users (veLIX lock)
