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Linear Finance

Bridge Mutual — Linear Finance AMA Recap 30/08/2022

Earlier this week, the Linear Exchange Community hosted a new AMA on Telegram. Linear Project Lead, Kevin Tai, was joined by Bridge Mutual’s CEO, Mike Miglio, to talk about the newly announced partnership between the two projects.

Check out the full recap below:

Ant (Host): Welcome Kevin and Mike and thank you for being here today!

We’re going to go over some questions on this sparkling partnership and what this means for all of us.

But first, Kevin, before we get started on more Bridge Mutual-focused questions, could you provide us with an update on what’s been going on with all things Linear-related?

Kevin | Linear Finance: Sure thing…

We’ve been keeping busy at Linear Finance and continue to build for our users. There has been quite a lot that’s been going on.

One of the big milestones that we’re very close to achieving is the launch of Athos Finance, Linear’s integration on Polkadot via Moonbeam. The team led by our Kelvin Lam is doing a terrific job, they just did the Athos utility token $ATH IDO a couple of weeks ago and we were happy to see sell out within the first 48 hours. The team is close to launching their first dApps on Moonbeam: Athos Exchange and Athos Buildr. This is great news as the Linear Finance family keeps ticking boxes on our roadmap and continues developing as a true cross-chain compatible protocol onto more blockchains as we currently are on Ethereum, BNB Chain and Moonriver (Chaotic Finance) already. Note that with the Athos deployment, the next step is to build multi-collateral so that LINA holders can access ATHOS... Kelvin and the team are pushing on this.

We also recently deployed our latest dApp, the Linear Debt Terminator. This new permissionless dApp allows users to help safeguard the protocol and its resistance to volatile market conditions. Users holding LUSD can now liquidate accounts whose p-ratio has fallen below 200% and have failed to restore their P-ratio up to a minimum of 500% after 72 hours. If you haven’t checked it out please do so here: https://debt-terminator.linear.finance/

One last thing to note is that conversation in the Linear DAO Forum has been very active. We’re very lucky to have such an engaged community and we want to thank you for this. There’s been discussion on several topics like P-ratio reduction, LUSD peg alternatives, and a transaction settlement button, among many others. If you have any good suggestions you’d like to make or just want to join the conversion please head over to https://forum.linear.finance/. Internally, we continue to have discussions on what the next BIG steps are for Linear. We will be sharing these with the Linear DAO as plans progress…

Ant: I got to admit, I’ve been playing terminator a bit lately and it’s pretty sleek.

Good that we’re working on the lUSD peg!

So now to the real guest of honour (sorry Kevin), Mike, can you give a brief introduction on yourself and also on Bridge Mutual so the Linear community can learn more about you guys?

Mike | Bridge Mutual: Sure, I’m a retired crypto-securities attorney from America and serial entrepreneur. I started Bridge Mutual 2 years ago. We’ve had our ups and downs, with as many as 40 employees at one point, but down to a solid and sustainable crew of 15 dedicated experts in their craft; a healthy mix of developers, mathematicians, product designers, and a small marketing team.

Bridge Mutual is the name of our protocol. It allows users to buy or sell insurance to other users. It has numerous products right now by default, which we’ve designed, such as smart contract insurance. But we are soon overhauling the entire protocol and releasing a lot of news on the features we’ve been working on in private that will set us far apart from competitors. We will be a permissionless, decentralized insurance platform that can be used by anyone to insure anything, literally, that you can think of.

Ant: Insure anything?

Mike | Bridge Mutual: Literally anything. under any terms you can imagine. We hope to revolutionize the way humans use and create insurance products. The industry hasn’t been revolutionized in over a century. It’s overdue for a re-design.

Ant: Seems like an excellent idea. I got some stuff I’d like to insure

But Kevin, there are numerous insurance protocols out there, what is the key reason to choose Bridge Mutual as a partner?

Kevin | Linear Finance: So Mike and the Bridge Mutual team were one of our earliest partners and the first insurance protocol that we had discussions with many moons ago. Their team continues to build and innovate and they have lasting power which goes a long way in DeFi. We are super excited to really launch our partnership now as they have released the BNB Chain version of their dApp.

The benefit to Linear users is two-fold. On the one hand, it will allow both existing and new users to explore the Linear ecosystem worry-free knowing that they’re now protected against potential hacks and exploits.

On the other hand, users who believe in our protocol and hold USDT can provide coverage and receive both USDT from the premiums paid and earn Bridge Mutual’s BMI token from the reward pool.

Ant: Very intriguing! I will go and check it out ASAP as a true believer and partial USDT holder.

Mike, so we know why Kevin likes you so much, but why has Bridge Mutual chosen to partner with Linear Finance? And what benefits will their users enjoy?

Mike | Bridge Mutual: Regarding USDT, and stablecoins in general. It really seems like there is no solid solution. We saw USDC earlier this month freeze all their tokens on Tornado cash. It’s too centralized to be reliably used, and we fear they may turn their centralization on against “non compliant” protocols.

As Kevin said, we’ve known the team at Linear finance for at least a year, maybe closer to two. At Bridge Mutual, partnerships come in the form of “white listing” pools. A white listed pool is a pool that pays people in $BMI tokens to provide coverage for another protocol. Only legitimate and serious projects get white listed on our protocol.

For those that believe Linear is a safe and trustworthy app, they can stake their USDT against Linear to provide insurance coverage for it in exchange for a variable APY, which often borders on the higher end, especially for single-staking an asset like USDT where the APYs are typically around 5% and maximum 20% — you can see that on the BNB version of our app many pools are sitting around 70% APY..

And for users that use Linear, they can now purchase coverage on our protocol to enjoy coverage from hacks, exploits, front end attacks, and more. If anything ever happens to Linear, policy holders will be reimbursed for whatever they lost, up to their policy maximum.

Ant: Excellent synergy! Love how this works together.

Kevin, do you think that the ability to purchase insurance will make the network more valuable for those who want to hold $LINA for the long term?

Kevin | Linear Finance: At Linear, there is an upmost importance on protocol security. Our contracts are audited but sometimes these audits aren’t enough for users to feel safe depositing their assets into projects in the DeFi space. Which is why we believed it was the perfect time to launch the Linear coverage pool on Bridge Mutual and allow our protocol users to get that additional layer of protection. It’s simply a way for users to have peace of mind.

And yes, the value of a network relies heavily on decentralization and security. With the recent hacks and exploits we’ve come to notice that it’s not only the project under attack that gets affected but the industry as a whole. So having the option to both provide and get coverage can only be helpful to a network or protocol.

Ant: I wholeheartedly agree with that. Security is number 1. And having this extra layer is the finishing touch!

Mike, what is your general take on the security in DeFi space and how it’s maturing, especially with your crypto lawyer background?

Mike | Bridge Mutual: I think in general, not speaking specifically about any one project, that there are a lot of unknown risks in DeFi that make it difficult to invest in the space long-term without insurance. Projects are becoming more innovative, but very few projects are taking into consideration their own long term survivability or the safety of their users. Very few teams seem to care about anything that does not directly increase their TVL; but luckily there are teams like Linear Finance and Lido Finance that do care, and prove it by partnering with insurance protocols in an effort to protect their users.

Many project teams actually believe that associating with an insurance project is the same as admitting that their code is faulty and that their protocol is at risk of being hacked. They would rather completely ignore the truth that even the most advanced protocols in the space get exploited successfully, and keep their users ignorant of the fact that their funds are exposed to some level of risk. I would say that nobody in the space should trust any project that makes no mention of potential risks or refuses to associate with or partner with insurance projects–they clearly don’t have their users at heart.

Ant: Very true! It shows confidence in your own project together with a realistic mind and a heart toward the user!

Kevin, Mike mentioned that Bridge Mutual is a decentralized, no-KYC platform. What is your take on the importance of decentralization?

Kevin | Linear Finance: Given what has happened the last few weeks, this question is very pertinent. I think DeFi and the crypto space right now are at the cusp of seeing what happens with decentraliztion + regulations and of course the Linear Finance team is also watching to see what happens…. BUT, hell… we are in “DE”fi so our end goal is to always push to give access and control to the users….. Our protocol is built in a way that is permissionless so that it can function by itself for the users…

Take for example the front end that the team built for liquidations. This was just made so its easier for users to conduct liquidations… The contracts were always permissionless and could be interacted with..

I think this is the foundation that all builders in DeFi should think about before tackling regulatory issues.

And lastly, similar to other protocols, we work to push a lot of the decisionmaking process to our DAO and our users… at the end of the day, we built it for you guys…. you guys should have a say in how its works and what we work on.

Ant: Thanks! It’s not always easy to figure out where to go, but when we discuss things together, we get further than we would alone!

Everyone join the DAO forum: https://forum.linear.finance/

Let’s discuss and think together!

Mike, rounding up for now…

What exciting developments will Bridge Mutual make in the DeFi ecosystem over the next few months?

Mike | Bridge Mutual: We have been building for 2 years now, and we can finally say that the protocol is reaching maturity. The system works as intended and we no longer need to focus on foundational code; instead we’ve started making a big effort to increase adoption, such as making more partnerships and rapidly expanding to other chains (we went to BNB last month and Polygon this month, more soon.)

Because we have built the entire system with decentralization in mind, in preparation for complete and total DAO ownership and control, what we’ve built has taken a lot longer to make than competitors. When a project is centralized, you can take a lot of short cuts by handling money and controlling how things work yourself–when you are decentralized, everything has to be coded and humans must be properly incentivized to behave in the protocol’s best interest. For this reason, our math and product team is robust, and we went through extensive modeling for edge case scenarios which took a lot of time. The upside to what we’ve done is that we’ve created something that is infinitely scalable, so even though it was slow in the making, it can also grow at incredible speeds if we garner adoption.

Ant: That sounds like a very promising future!

Thank you Kevin and Mike for answering my questions :D Do you have a second to see if some others have a question?

Kevin | Linear Finance: Sure thing

Mike | Bridge Mutual: Of course

Anthony Van Gansen: Mike, when you provide liquidity/coverage for a pool on Bridge Mutual, do you receive an LP token?

Mike | Bridge Mutual: Yes you do. You receive bmiXcover token, where “X” is the name of the protocol.

Tjewbakka: if someone buys coverage and let’s say an event that is covered occurs. will that person that bought coverage get 100% of what he had lost in the protocol?

Mike | Bridge Mutual: He will get up to his policy maximum, as much as you have lost but not more than the policy is worth. if you invest $50k in a protocol and you have a policy for $70k, you would only receive $50k back. the $20k you have left would still be available but you’d need to then lose another 20k on that same protocol.

Ferhat: Mike your point of view was interesting and I’m wondering what will happen with insurance.

Kevin, what are the plans for Linear after Athos Finance launches? are there any plans for L2 integration? ZKRollups?

Kevin | Linear Finance: Hey you, I know you!!!! let’s just say we love ZK. That’s all I can share for right now until things become much more concrete.

Mike | Bridge Mutual: Thank you for taking an interest in my point of view. I think insurance is a necessary part of any financial market, and it has its place in crypto. But right now the average crypto user is immature and has a bad understanding of risk. Many users opt to chase insane APYs without considering or understanding the chances of that money is lost forever.

Murat Yilmaz: Mike Are there any big protocols like Binance interested in adopting the “BMI widget”?

Mike | Bridge Mutual: At one point there was interest with Bitfinex but the problem is a lack of liquidity to support the kind of volume they would need. No talks with Binance about supporting our insurance widget. For all that don’t know, a widget is a front-end tool that we made for other protocols to use and that allows people to buy insurance from BMI’s backend.

Swnl2: Hey guys one question, with Chaotic Finance on Moonriver and Athos Finance on Moonbeam. Does Bridge Mutual plan on expanding on any of these networks?

Mike | Bridge Mutual: We will eventually be on every chain, right now we’re adding about 1 new chain per month. Each one requires setting up, testing, the addition of pools, reaching out to protocols on those chains for sponsorship and support, etc. Right now our focus is Polygon.

Murat Yilmaz: Mike what happens if people provide coverage but no one buys the policy? They get paid APY, but it doesn’t generate revenue… so eventually, the pool will be empty.

Mike | Bridge Mutual: APY is variable. Pools without any coverage policy buyers have much lower APY than pools that do.

We measure this using the “Utilization Ratio”. Right now you can see all the URs of every pool we have. We have a set amount of BMI that goes out every month, and it gets split across all the pools proportionate to their demand.

Ant: Some very nice questions! I’ve learned a lot today.

Thanks, Kevin and Mike for making the time!

Kevin | Linear Finance: Thanks much!!! and much thanks to Mike and the Bridge Mutual team!

Mike | Bridge Mutual: Thank you guys for hosting us and allowing your community to learn more about us.

Ant: Thank you for being here and for building awesome things!

Let’s get this partnership on the road…

About Linear Finance

Linear Finance is a cross-chain compatible, decentralized delta-one asset protocol that allows users to get synthetic exposure to various assets, including cryptocurrency, commodities, and market indices. Users can utilize our cross-chain swap functionality to instantly swap assets across leading blockchain environments and DeFi protocols with unlimited liquidity and zero slippage.

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Linear Finance

Linear Finance

A Decentralized Delta-One Asset Protocol with Unlimited Liquidity