Recently, INS3.Finance launched a new insurance investment function, using the DAO to invest more money and equity in ITFX for incentives.
INS3. Finance abandons the process of governing token voting to decide whether to pay, and automates reimbursement judgment by building a decentralized, impartial Blockchain Oracle system. For exchanges, INS3. Finance’s Oracle tests the exchange’s withdrawals daily to see if they are paying; For DEX, the balance sheet ratio is used to determine whether or not to pay; For machine gun pools and lending items, the physical delivery model of put options is used to determine whether or not to pay.
Bringing independent research results to Underwriting
INS3. Finance’s underwriting model is based on the concept of game theory, as the capacity of each insurance product relies on staked INS3. Finance tokens from risk-takers. We expect underwriters and the sophistication of their strategies to increase as competition increases, taking exposure based on their own perception and evaluation of risks in comparison to estimated returns. Successful strategies can be deciphered on Ethereum-like public chains, by looking at staked token amounts. These reflect the research and strategy of an Underwriter. With the INS3. Finance privacy technology is yet another example of how sensitive data can be preserved.
“When it comes to building a risk marketplace offering insurance solutions for decentralised protocols, its accessibility should be discretionary for users among different blockchains. After considering implementation on different layer one protocols, the INS3. Finance and its on-demand privacy feature is one of the best structures we have come across with. Privacy opens up a new spectrum of opportunities and features, allowing insurance to be purchased/underwritten in a game-changing environment”, commented Louis Rothschild, Senior Decentralized Insurance Analyst at INS3.Finance
Fair & privacy-preserving claim assessment
INS3. Finance’s claim assessments include a section where claim assessors can access the filed claim and broadcast their decision related to a given claim submission. This being a key step influencing the final result during claim assessments, it would enhance neutralism of the process, e.g. having voting results kept private while the voting is on-going.
Over the long term, INS3. Finance are committed to working together and exploring alternative ways to offer dedicated insurance for different verticals, moving beyond smart-contract exploitability.
By allowing for data to be utilized by INS3. Finance for risk assessment purposes while preserving privacy, users could be able to benefit from accurately priced on-chain insurance coverage for external events.
Importance of Insurance in the DeFi
The explosive growth of DeFi raises concerns, such as scaling, gas fees, and, worst of all, theft. DeFi has become a popular hunting ground for hackers. In the past two months, two DeFi security incidents have been stolen for 250 million. Are there high-risk vulnerabilities in financial innovation smart contracts?
The risk of theft has a devastating effect on asset growth and the inflow of new investors into the DeFi ecosystem. This is where DeFi asset coverage comes into play.
DeFi coverage providers, as financial first responders, provide investors with fundamental risk management. DeFi coverage platforms, like traditional finance, are based on risk pooling, transfer, and sharing. Investors who do not have coverage must adopt a lower risk tolerance and accept lower returns. DeFi coverage protocols enable investors to protect their assets without the assistance of a traditional bank.
Decentralized Insurance products, for instance, INS3.Finance, provide complete protection for DeFi deposits, hedge risk against crypto volatility and flash crashes, and provide security against the risk of crypto wallet theft and attack. They protect users from any potential DeFi risks and cover technical and financial risks, providing investors with a sense of security. Not only that, but the platforms make the entire submission, claiming, processing, and payout process extremely safe, dependable, and transparent.
One of the advantages of such decentralized insurance is that it protects most deposits against loss. DeFi is regarded as secure, and thus as a solution to hacking, particularly on exchange platforms. The operation of so-called “autonomous” smart contracts has proven difficult. This is due to the lack of upgradeability and the use of smart contracts. Smart contracts use decentralized insurance as an operating system.
Decentralized insurance is self-sufficient. Intermediaries are exempt, so there are no middleman fees. As a result, using decentralized insurance becomes a simplified and low-cost procedure. Decentralized insurance is also transparent, immutable, and allows for the liquidation of crypto-backed assets.
Few Challenges of the Decentralised Insurance
There are currently numerous trading platforms that are highly centralized, which can crowd out and suppress the DeFi sector.
Furthermore, decentralized insurance allows traders to trade publicly, which has raised privacy concerns. Because of the autonomous nature of decentralized insurance, users are unable to change their information and thus cannot interact directly and edit their data. As immutability is a critical component of the decentralized system, this has resulted in numerous disputes and fraudulent cases in the industry. This could affect the demand for decentralized insurance applications.
Because of the transparency and security it provides to investors, decentralized insurance is a promising sector. There are currently only a few products available, but it has the potential to grow and expand in the future. DeFi and its applications, such as Decentralized Finance, will continue to dominate the market for many years.
About INS3.Finance
Although it is still in its infancy, decentralized insurance is rapidly expanding and holds great promise for the industry. The number of products is still small at the moment, but it is certain to grow in leaps and bounds in the coming days.
INS3.Finance is a decentralized multi-chain insurance protocol, to empower the risk protection infrastructure for the DeFi community. INS3.Finance offers portfolio-based insurance products with optimized pricing models to substantially lower the cost; launches insurance investment functions with flexible underwriting mining programs to create sustainable returns for the participants; and provides coverage for cross-chain DeFi projects to benefit the whole ecosystem.
INS3.Finance is backed by Web3.VC, OKEx Blockdream Venture, Conflux, Legos capital, BiKi, Horizon capital, Gate labs, Beagle capital, Orange code capital and a dozen of other top funds.
