The Secret InsureDAO’s Master Plan (just between you and me)
My last article shared improvements for the recent issues, but this time I’d like to share a bit more about how InsureDAO will succeed in the long run.
We need a safer DeFi ecosystem.
As you know, DeFi is a brutal place where you may earn 10,000% APY or your funds may get exploited by bugs/hackings. You probably enjoy it or at least managed to deal with it. However, for an average person, they just want to put their trust in DeFi as they have in Trad-fi, and they don’t want to put their money in a system where there is a chance that their money won’t come back. It is also unlikely that non-tech users to DYOR(Do your own research) on a protocol.
The global economy and average users will switch over to DeFi once it equips a system with protection against bugs or hackings, and DeFi will become just Fi. So, the ecosystem itself needs to be safer. InsureDAO’s first product is DeFi insurance, but I want you to know that DeFi insurance connects the future global economy and DeFi today.
It is also essential to share that protection by the operational entity or the regulators is not ideal in DeFi. Otherwise, DeFi becomes just an ugly copy of Trad-fi.
Structure the market
Critical to making it happen is to build an active market for trading risk and premium that contributes to the entire system's stability. This is why we made InsureDAO a permissionless insurance market. Before InsureDAO, for most DeFi protocols, there was no protocol that allowed them to create their insurance market. Even there is an insurance market for a DeFi protocol, it won’t contribute to decreasing the hack itself while it helps insurance policyholders. Here InsureDAO’s Bounty feature comes in. In a recent change, InsureDAO got able to add the bounty feature in addition to the insurance feature.
With Bounty, hackers who have been making unmanageable money while also damaging the entire ecosystem will start to gain untainted money and a reputation for having saved the entire ecosystem. This will enable a positive feedback loop for the entire ecosystem.
InsureDAO’s Bounty requires a hacker to report an actual hacking simulation process to ReportingDAO. When the simulation shows actual damages, the payment is made in accordance with the prescribed rules. By preventing outflows of funds from the protocol itself, the payout amount will be much less than it would be in the case of actual hacking damage, which will benefit the underwriters and, most importantly, the ecosystem as a whole.
So how does Bounty actually work? Here are the gists;
- Permissionless market to trade risk and premium
- Third-party Verification
- Potentially larger payout
I should mention InsureDAO is the only protocol that combines bounty and insurauce features and actually contributes to decreasing hackings with the market mechanism.
Now I can say that the more InsureDAO grows, the safer the entire DeFi ecosystem becomes. Let’s see how we can get there.
Ignite the market activities
INSURE Token is the heart of the governance and incentive structure, and in the early days, it will play a role to foster activity within the market, particularly underwriting and liquidity providing.
The incentive mechanism of the INSURE Token and protocol is based on (forked from) Curve. Therefore, the token lock mechanism, which is becoming well-known recently, the boost mechanism, and the Gauge Vote, which determines the allocation of tokens to be inflated, are included as standard features.
DeFi protocols can control the rewards of the emitted INSURE tokens, thereby encouraging underwriters to fund their own protocols. Most recently, the Curve War was a hot topic on the Curve protocol, where more CRV tokens were collected to secure rewards for their stable coin pairs; InsureDAO also has a finite amount of INSURE emissions, so protocols that wish to provide decrease the risk of hackings should do so as soon as possible!
So, it’s safe to say it’s a good idea to buy up INSURE tokens.
There are more coming
InsureDAO is just getting started, but the real evolution is just beginning. Below are some of the currently planned evolutions.
Multichain expansion
Many products are deployed on chains such as the Binance chain, Polygon, or Arbitrum, where there are numerous hacking risks and real damages. Don’t get me wrong, but in my opinion, there are many products that are put out without audit. So I would say there are many products that potentially need InsureDAO.
Web3 insurance, not only DeFi
Crypto/Web3 ecosystem is evolving rapidly, and new projects of NFTs, DAOs are emerging. InsureDAO wants to cover exotic risks in such markets. There would be insurance for NFT, DAO rug pull, or multi-chain bridges.
Insured DeFi aggregator
I know everyone wants to just stake and do nothing without any fear of hacking. Insured DeFi aggregator is a perfect fit for that kind of person.
Insured DeFi aggregator allows people to stake their tokens with insurance, so even if a hacking occurred and their funds were exploited, there is no actual damage on their staked value. InsureDAO will also provide APIs to allow DeFi projects to easily integrate InsureDAO’s function in their UI. I believe this form is a more user-friendly and ideal form of insurance distribution.
Pooled Asset Management
When underwriting a pool, an underwriter needs to lock their tokens. Pooled assets just do nothing if there is no module that allows the pooled asset to work. the Pooled Asset Management module intends to deploy pooled assets to other DeFi protocols to earn interests or develop our own lending module to accrue interests.
Accelerate the growth by community driven development
The most important thing to remember is that these improvement ideas are just the beginning — InsureDAO is a DAO and the Bounty idea was actually provided by WatchPug, one of our DAO members. I am sure that many more great ideas will come from the community in the future. And the growth of InsureDAO will be accelerated by the excellent ideas. I encourage everyone to participate.
So, in short, the master plan is:
- Build a market
- Ignite the market activities with tokens
- Accelerate the growth by community driven development
- DeFi becomes just Fi and becomes a protocol of the global economy
Don’t tell anyone.🤫
About 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, we offer the lending function to INSURE token stakers.
If you are interested in learning more, check out our white paper.
Also, you can join us on Twitter, Discord, or Telegram! :)
Twitter: https://twitter.com/insuredao
Discord: discord.gg/8BA5f5rurq
Telegram: https://t.me/InsureDAO
