Manifesto for a decentralised crypto insurance - UNSLASHED FINANCE
“I can’t breathe.
My heart beats loudly but I barely notice it.
My hands are sweaty as I dial my Ledger pin for the third time.
Where is it? WHERE IS IT?
I am shaking and can’t think straight.
Everything is foggy. I tried to reach a friend on Telegram but it’s 2am and he must be sleeping.
I need to take a step back. Clear my head. I can’t. Who could?
I rush back on Twitter. News keeps spitting out of this bloody media.
Some speak of a hack. Others of an exploit.
I just don’t give a shit.
They fight about semantics as if nothing else was important. Pathetic. Worthless.
I checked my Ledger again.
It can’t be true. Not to me. No way.
This must be a nightmare. I am sleeping. Any moment now, I will wake up with the smell of a fresh croissant, the ray of sunshine in my window.. and all my money still in my wallet.
Don’t tell me I just got REKT.”
CRYPTO NEEDS INSURANCE
Bzrx — Pickles — Cover.
So many names fell this year.
Bitfinex — Parity — KuCoin.
So many people were affected.
CoinBene — 2gether — Bithumb.
Millions were lost. Trust was broken.
Crypto is no different from any other industry: shit happens.
And when it does happen, people get hurt.
Badly.
If they are not protected.
Risks are high.
Risks are varied.
Risks are underestimated.
Smart contract hacks or exploits, oracle manipulation, data breaches, theft and so much more…
Identifying these risks, understanding them, and getting protection against them is something that should be accessible to everyone. From the smallest shrimp to the biggest whale or fund.
Although crypto and blockchain need insurance, traditional insurance companies in return do not need crypto. They see it as unpredictable and quite risky.
Historically, legacy players are slow to grasp new technologies and understand the opportunity behind these.
And as corporate players stay away from crypto and blockchain-related risks, some smart players thrived in the free spot, coming up with creative solutions to bring some protection to their users.
These pioneers did a great job fulfilling a basic and growing need.
As the market matures, insurance should mature as well.
Solutions that are more effective, more efficient and more convenient should be made available to continue what has been started.
We have worked quietly, in the shadows, for long months going through the March 2020 crash and survived it to create of the stepping stones of crypto insurance.
We are now ready and this is our Hello World!
UNSLASHED: MAKING CRYPTO SAFER IS OUR MISSION!
Creating an insurance protocol requires both technical skills and a deep understanding of risk modelling.
We believe our solution goes far beyond what currently exists both from a product offering and a user experience perspectives.
Unslashed is built around 9 essential pillars.
PILLAR #1. QUANTITATIVE MODELLING AT HEART
Most of our team members either have backgrounds in finance or mathematics in addition to being entrepreneurs, technologists and crypto early adopters. Since our early days we wanted to figure out different ways to approach multidimensional blockchain risks and model them. We onboarded quants from TradFi and managed to build and calibrate some models that allow us to fairly price risk and start structuring insurance products. This is one of the most difficult aspects of insurance and this is ongoing R&D that we will be conducting over the coming years. Our objective is to make sure security for blockchain and crypto is a no-brainer.
PILLAR #2. VERTICAL AND HORIZONTAL DIVERSIFICATION
Diversifying across multiple smart contracts is not enough. Similar design patterns lead to similar attack vectors — the last few months proved it, repeatedly.
We chose to diversify our Underwriters/Capital Suppliers risk across as many verticals as possible beginning with smart contract risk, validator slashing on different PoS networks, exchange hacks, etc.
This level of diversification allows Capital Suppliers to be hedged and ensures they are handsomely rewarded with premiums for being the heroes that crypto needs.
PILLAR #3. PREMIUM STREAMING & REAL TIME PAYMENTS AS CORE PIECES OF OUR DESIGN
Blockchain technology makes it possible to think in « real time ». Seamless transactions, smart contracts that can be called whenever we want, 24/7 oracles, and more.
We decided not to throw some « real time » glitters in our product but to think of it as *being* real time.
What does this mean ?
➡️ For the insured, you only pay what you use and when you use it. You start and end your cover policy whenever you want, and the premium payments are calculated live. Cool, huh?
➡️ For underwriters/Capital Suppliers: you receive the premium payments live as they are streamed to you. You are never locked in a specific policy for an amount of time; we designed our protocol so that you might leave a pool or a bucket whenever you want or have access to liquidity in order to close your position. Sweet taste of freedom!
PILLAR #4. CAPITAL EFFICIENCY
Former crypto-insurance models were lacking something important. They did not make the best use of the capital on their contracts, making scalability a utopia and raising premium prices.
We improved it in three ways:
➡️ The buckets: they spread risk across multiple pools and make it possible to use the supplied capital with a uniquely computed and updated leverage for each different bucket based on numerous criteria.
This means higher yield that results from a higher diversification. 🤯
➡️ All supplied capital could be used for insurance. There is no Liquidity Pool associated with a bonding curve or an AMM that has a devastating slippage. 🥳
➡️ The Supplied Capital can be put to work the same way it is done in traditional insurance. This also explains the close ties between Insurance and Asset Management. Money never sleeps. 💰
PILLAR #5. SMART LIQUIDITY
We love DeFi legos: seeing protocols being interconnected and using each others tokens to add value.
We let Capital suppliers and coverage seekers trade their underlying tokens at will on external platforms. Both sides’ positions are tokenised and are classic ERC-20 tokens.
We believe that doing so will allow other protocols to build on top of Unslashed and create more added value (for example by issuing risk-free tokens that combine a position + insurance) or letting users arbitrage their personal risk/insurance exposure (for example selling their premium tokens at a higher price when there is a lack of capital to offer more insurance).
We are confident you will love that.
PILLAR #6. NEUTRALITY
When a claim occurs, the ones in charge of deciding whether it is valid should be unbiased. This seems obvious to us.
We will have a 100% independent claims system. Period.
PILLAR #7. PRODUCT INNOVATION
Insurance was long limited to DeFi protocols and covered smart contract hacks only. That is a short sighted view, as risks are much more present than we first think.
We analysed and broke-down the current and future risks a user could face in crypto and we decided there was a need to expand the protection to new territories: custody, hardware and software wallets, validator slashing on PoS networks, oracles and stablecoin USD pegs.
We are going to cover much more tomorrow.
Excited? Not as much as we are.
PILLAR #8. TRANSPARENCY
Blockchain and Smart-Contracts allow to have something that is very difficult to obtain in the traditional insurance world: transparency. A transparent system means an insurance provider’s health and risk exposure could be audited by anyone. Most traditional insurance companies are blackboxes even for the regulators, let alone external auditors. Cover seekers and protection buyers should require this level of transparency.
We are giving you the power back. We think you deserve it.
PILLAR #9. “HACK ONCE, WIN TWICE” RESILIENCE
Some hackers try to play it smart: before exploiting a vulnerability and stealing funds, they would buy coverage to bet on the hack. After the hack is performed, they would claim a compensation, earning twice in the process. And a KYC doesn’t stop them.
An insurance product only covers and compensates real losses. Our protocol can not be gamed by this kind of behaviour unless the hacker is willing to put his own money at risk. As a result, our users would not have to pay for this kind of exploit.
Sleep tight, we are taking care of this.
JOIN OUR PRIVATE LAUNCH AND START EARNING CAPITAL MINING REWARDS. NOW.
We are launching today.
We are launching to make DeFi and crypto safer.
We are launching to disrupt the insurance industry and be one of the leading InsurTechs.
Wanna join?
Be one of our day-1 supporters.
Join our capital mining program: supply capital on our platform and get rewarded for that.
Be quick to join: during the first weeks, and while in invite-only private launch, we have a x1.5 boost incentive for capital providers. We will share more about our liquidity mining program soon.
Read how to get an invite code in one of your favorite DeFi communities.
LEARN MORE ABOUT UNSLASHED FINANCE
Website: https://unslashed.finance
Team: https://unslashed.finance
Capital Mining: https://link.medium.com/buZvUyy9Vcb
Twitter : @UNSLASHEDF
Telegram: @UnslashedFinance
Discord: https://discord.gg/jQFxqTpbYC
Contact : @marouaneh
