💡InsureDAO for Smart contract hackings/bugs
an Insight before we get into the deep.
InsureDAO
InsureDAO is a peer to pool insurance market protocol builds on Ethereum. The operation and management of the protocol are controlled by a DAO, and anyone with access to Ethereum can create, purchase, and underwrite any insurance without KYC.
Moreover, each insurance pool is separated on InsureDAO. That is to say, any payout from a certain insurance pool doesn’t affect other insurance pools.
InsureDAO consists of 3 following services: I. InsureDAO Build; II. InsureDAO Market; and III. InsureDAO Lending (Under Development)
I. InsureDAO Build
A. Insurance pool creation
InsureDAO allows users to create any insurance pool like anyone can create any liquidity pool on Uniswap, since InsureDAO separates insurance pools for each protocol and the risks are segregated. Therefore, any insurances, including even risky protocol insurance, will be available to buy and sell on InsureDAO.
The governance token address needs to be the same with the chain of the connected chain.
B. Composable architecture
With the open insurance creation system, any new protocol can immediately build their reliability by creating insurance itself and providing the liquidity. Moreover, as each insurance pool is separated, protocols easily integrate our insurance scheme into their products.
II. InsureDAO Market
A. Dynamic pricing
InsureDAO uses an algorithm to measure risks and the pricing of the premiums based on the market’s supply and demand. Also, to prevent the drastic change of the premium, InsureDAO uses one more parameter called, Insurance Pool TVL. When the TVL is under $1M, the change of the premium rate would be flatter.
B. Token rewards
InsureDAO incentivizes the users to provide liquidity as insurance underwriters by token rewards. Token allocation through Liquidity mining will continue perpetually. It provides continuous motivation for liquidity providers.
C. Custom risk Index
Custom risk Index consists of different insurance pools. Liquidity providers can select any index to deposit their funds based on their risk appetite. Furthermore, All index pools leverage their staked liquidity and provide them to their underlying pools, increasing the underwriter’s fee earnings while lowering insurance premiums.
III. InsureDAO Lending (Under Development)
A. Lending function
Users can borrow the liquidity in the insurance pools by locking and collateralizing INSURE Token. InsureDAO Lending enables underwriters to optimize the efficiency of funds by selling insurance and lending their own asset simultaneously. Moreover, this implementation adds another utility of INSURE token that leads the higher value of the token itself. This development takes a while, so expect it after the launch.
Reporting
a. Reporting process
ReportingDAO
As the judgement module, InsureDAO delegates the authority of Insurance payment to ReportingDAO.
ReportingDAO consists of members who have INSURERPT token (InsureDAO Reporting Token), and it's granted/burnt by The Community DAO. ReportingDAO intended to be neutral and expected to validates the incident case based on the fact and payment guideline.
INSURE token
The main purposes of the INSURE token are to incentivise liquidity providers on InsureDAO, and as many users as possible to be involved in the governance of the protocol. INSURE token will be issued permanently, and total supply will be controlled by burning mechanism.
a. Locking
INSURE can now be locked to receive trading fees from InsureDAO. Every pool allows the admin to collect fees. Collected fees are distributed by buying and burning INSURE tokens by the protocol.
b. Boosting
One of the main incentive for INSURE is the ability to boost your rewards on provided liquidity. Vote locking INSURE allows you to acquire voting power to participate in the DAO and earn a boost of up to 2.5x on the liquidity you are providing on InsureDAO.
c. Voting
Once INSURE holders lock their veINSURE, they can start voting on various DAO proposals, such as ReportingDAO election, and pool parameters.
Use cases
Smart Contract Pool Insurance
InsureDAO provides an insurance for a loss of funds from smart contracts due to a certain incident such as a hack, bug, exploit or economic manipulation attack.
Especially, InsureDAO insurances indirect losses caused by external contracts. (e.g. if you stake to yearn.finance and the funds are re-deployed to curve.fi; you will be covered if funds are hacked/stolen/or lost on curve.fi)
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