Cefi and Defi risks in the field of digital assets are frequent. In the recent Kucoin theft, $150 million was lost in ERC20 tokens alone.
In this regard, the INS3 team will soon launchExchange credit CDS insurance for various risk events such as exchange theft, bankruptcy, and running awayIn addition, the customer deposits the policy and USDT of INS3 in Moonswap and Uniswap to provide liquidity for the policy CDStoken, obtain LP, and deposit the LP token into INS3 to obtain the token reward of INS3.
CDS token
Different from NXM insurance, INS3's insurance policy is an ERC777 token of the CDS concept standard, which can be traded anywhere, and customers can also withdraw the policy at any time.
In addition, the customer deposits the policy and USDT of INS3 in Moonswap and Uniswap to provide liquidity for the policy CDStoken, obtain LP, and deposit the LP token into INS3 to obtain the token reward of INS3.
Actuarial and Premium Modeling
Different from NXM's single method of linking insurance premiums with staking amounts and using staking expectations to price project default rates, INS3 uses an actuarial model that combines the expected model, KMV model, and scorecard on the independent chain to determine insurance premiums.
Let me first introduce theKMV model model。
Credit insurance premium pricing = insured amount × (risk-free interest rate + default rate).
Among them, α is the short-term loan multiplier, SD is the company's short-term loan, β is the long-term loan multiplier, and LD is the long-term loan.
Among them, V is the company's asset value, μ is the drift rate of asset value, δ is its volatility, and dW is the standard Wiener process.
Assuming that the debt period is T, the company's equity value is E, the liability is D, and the risk-free interest rate is r, according to the option pricing theory,
Calculate the default distance DD from this:
And estimate the optimal default point parameter:
Among them, α is the short-term loan multiplier, SD is the company's short-term loan, β is the long-term loan multiplier, and LD is the long-term loan.
In the simulation practice, the INS3 version of the KMV model predicted the theft of BZRX on September 13 in advance, and raised the estimated premium from 4.62% to 13.66% on the eve of the theft.
In the simulation practice, the INS3 version of the KMV model predicted the theft of BZRX on September 13 in advance, and raised the estimated premium from 4.62% to 13.66% on the eve of the theft.
Let me introducescorecard model。
The INS3 team drew on the defiscore model to create a scorecard model for the on-chain information of each defi project:
Among them, smart contract risk weight accounts for 45%, collateral risk accounts for 20%, liquidity risk accounts for 10%, protocol management right risk accounts for 12.5%, and oracle machine risk accounts for 12.5%.
The actuarial model of INS3 integrates the expected model, KMV model and scorecard model for actuarial pricing. The degree of refinement, actuarial stability and accuracy are all improved compared with NXM.
The actuarial model of INS3 integrates the expected model, KMV model and scorecard model for actuarial pricing. The degree of refinement, actuarial stability and accuracy are all improved compared with NXM.
Staking
At the same time, participating in staking can also get INS3 token rewards.
If you do not want to transfer, the staking capital can be withdrawn at any time when the capital adequacy ratio is sufficient. If the capital adequacy ratio is not sufficient, customers can cancel the policy and withdraw. For example, in the case of Kucoin's insurance policy, the premium increase of 321% in one day, the cancellation of the policy can also make a profit.
Participating in staking can obtain 70% of the premium share. If the leverage is 5-10 times, the annualized premium income of 15%~350% can be obtained.
At the same time, participating in staking can also get INS3 token rewards.
investment model
Different from NXM's centralized method of deciding whether to pay compensation in the form of initial review by the board of directors + community review, INS3 uses a self-built oracle model, and anyone can use the API to judge whether the market is correct, whether the assets are safe, whether they can withdraw coins, etc. Original comprehensive algorithm to judge whether there is a security incident on the exchange. Participating in certification is a kind of behavioral mining, and mining rewards can be obtained.
Oracle
Different from NXM's centralized method of deciding whether to pay compensation in the form of initial review by the board of directors + community review, INS3 uses a self-built oracle model, and anyone can use the API to judge whether the market is correct, whether the assets are safe, whether they can withdraw coins, etc. Original comprehensive algorithm to judge whether there is a security incident on the exchange. Participating in certification is a kind of behavioral mining, and mining rewards can be obtained.
point of difference
We compare INS3 with the insurance programs NXM and Yinsure currently on the market in the table below:
The tokenization of capital means that you can directly invest in "insurance companies" without resorting to financial instruments such as stocks or bonds, and can exit and trade. As a result, a "loadable" and "programmable" "insurance company" appeared, which is the progress of production relations brought about by the blockchain.
The tokenization of capital means that you can directly invest in "insurance companies" without resorting to financial instruments such as stocks or bonds, and can exit and trade. As a result, a "loadable" and "programmable" "insurance company" appeared, which is the progress of production relations brought about by the blockchain.
The global team of INS3 has passed the audit of the Conflux Community Ecological Foundation and obtained its funding by virtue of its technical development skills and experience in the actuarial field.It is expected that the first insurance product will be launched in mid-October: exchange credit CDS insurance.
INS3 hopes toDeFi + NFT+ oracle + cross-chainThe model brings innovation to the decentralized insurance ecosystem and createsCredible, secure, and borderless encrypted asset insurance ecosystem。
