Decentralized Finance (DeFi) is not just taking the cryptocurrency world by storm, and the disruption of traditional finance and industries is undoubtedly accelerating across the board. As of January 2021, over $15 billion went into various DeFi protocols, representing an increase of fifteen times the growth during 2020.
Most users that frequently visit DEXes (decentralized exchanges) have probably heard of revolutionary ways to harness the power of smart contracts to rid themselves of intermediaries that we’ve long had to tolerate – but how many of them know that the personal crypto-insurance market alone is estimated to become a $100 billion industry?
It’s difficult not to think about decentralization when it comes to the currency you acquire, the staking dApp (decentralized app) you earn passive income from, or the DEX that you interact with the most – but what about ensuring the safety of what matters the most to you?
Still, the current roadblocks to mainstream crypto-insurance adoption are the lack of options and the abundance of cookie-cutter insurance plans that are extremely limited in coverage. If planning for the future and being free from mediators are some of the main reasons to participate in the cryptocurrency market in the first place, it only seems logical and rational to look into what’s available to you. As Bitcoin and cryptocurrencies continue to gain attention in the masses’ eyes, the demand for crypto-based insurance products has never been more desired, or essential.
Polkacover aims to be the one-stop-shop for crypto and personal insurance needs. Founded in late 2019 with the mission of creating the world’s leading crypto-friendly DeFi insurance marketplace, the team is undoubtedly making the process of purchasing insurance quick, easy, and decentralized. Customers can expect the same convenience, access, and transparency just as they would in the traditional insurance industry – and Polkacover is systematically ticking off each box.
In the exciting yet unforgiving world of cryptocurrencies, less than 1% of all of DeFi, crypto, and NFT assets being sufficiently insured, this fact solidifies the product-market fit. The need for safeguarding digital assets seems to be trending in the favor of the Polkacover platform – with no signs of reversing anytime soon.
“Our vision is to align insurance purchase with the core principles of decentralized technology to be able to provide global access to users while offering a censorship-resistant platform and build open-source technology governed by software and controlled by its users.”
With various products and services to connect users with multinational insurers and decentralized insurance providers, the platform would provide several tokenized incentives making the costs up to 40% less expensive than any traditional insurance channel.
In the current landscape, the biggest issue with crypto-insurance offerings is that they aren’t yet providing fully comprehensive coverage, forcing those looking for coverage to purchase multiple plans to cover all their needs.
Incorporating the next-gen Web 3.0 blockchain technology and tokenized incentives, the on-going development of a frictionless insurance marketplace experience seems to be in full-swing at Polkacover.
- Cross-border insurance purchases & payment options incentives via token purchases
- Staking & community rewards for providing risk liquidity claims assessment & governance functions
- Discounts through token purchases P2P Insurance for developing markets
- 24/7 availability
- Real-time transactions
- Transparency of information
- AI-Based Automated claim validation Security and confidentiality
- Audit trail and full transaction history
- Resilience through the use of smart contracts
The CVR token is the native cryptocurrency of the Polkacover platform.
Total Circulating Supply: 134,929,870
Staking: Available at a later stage
Token Buybacks & Burns: 10% of all policy sold on a monthly basis
The Polkacover platform will provide rewards for good behaviors based on the below KPI’s:
- Claim assessment over a particular time (service stability)
- Claim assessment in a required quality standard quality / as per the SLA (quality stability)
- Take a particular liability for a service (guarantees)
Unsold tokens: Will be LOCKED for a period of 12 months, the tokens would be equally released (if needed) into the ecosystem over a period of 12 months (after unlocking) to further grow the Polkacover platform.
Token Burn: CVR intends a final circulating supply of 70 million tokens and will keep buying back and burning tokens from the open market on a monthly basis. The repurchase of these tokens is calculated at 10% of the all policies sold on a monthly basis. Transactions will be publicly viewable on the blockchain explorer.
There will be penalties for bad actors that could lead to burning the claim assessors’ entire stake if caught red-handed, working in bad faith.
The number of tokens that must be provided as collateral will correlate to the potential damage from a participant’s misbehavior.
- Policy Purchase Customers can buy insurance using the token
- For convenience, third parties can offer payment gateways and integrations, which remove the necessity to own cryptocurrency from the end customer
- Users can also purchase using other cryptocurrencies; however, additional discounts and benefits are provided for users paying through the Polkacover token
- Exclusive access to crypto insurance products
- Encourages the use of Policy discounts, up to 40% will be provided when using the token
Cross-Border Policy Issuance
- The platform will provide Global Policies that can be bought exclusively with the Polkacover token, globally
Global Claims Payouts
- All claims are paid out using via the token; customers can choose to hold the payment in the token or convert it into a fiat currency
- Polkacover-holders are incentivized to receive & hold the claim payouts in the form of the native token
Referral Rewards/Product Reviews/Survey Forms
- Customers who refer new customers will be paid using the token
- Customers who provide Insurance Policy reviews will be rewarded using the token
Fast Claims Incentive
Claims payouts where the Insurance Providers would need manual intervention would be sped up to streamline the claims process to incentivize the token to the claims agent/insurers in the event the insurance payouts were initiated with a quick TAT.
- As in the blockchain environment, customer data and claim behaviors are not shared with Insurance providers but aggregated on the PolkaCover platform
- If the customer allows sharing their information for market analysis, we will incentivize them with the tokens
P2P Policy Issuance/Claims
- P2P policy issuance/claims payout will happen exclusively through the tokens
Manual Policy Quotes
- Certain insurance policies cannot be hardcoded into the platform due to the insurance providers’ complexity and analysis in such scenarios
- Token incentives will be provided to the insurance provider for quick TAT responses
Upon holding the CVR tokens in your wallet, users will be rewarded with the below Annual interest paid in tokens:
- Additional discounts on the policy purchase
- Free insurance products depending on the staked value
- With the use of multiple smart contracts, the governance in the initial stage will be provided by the Polkacover platform
- The insurance product pricing for each pool will be managed by the governance body (Polkacover) for the initial 18 months after the products’ launch
- The governing body will decide on the rewards and penalties, this period will ensure there is enough historical data on the performance of the risk pool
- The pricing for the product is to be provided by an external actuary appointed by the governing body
Liquidity Provider (LP)
- The pool owners who have staked their DOTs and received Polkacover tokens in exchange will get a pool commission from every policy sold through their pool
Usage of Funds
- Funds received from the Token Sale are to be allocated to allow an active cash flow for 5 years and will be budgeted for:
- Platform Development – 30%
- Business operations – 25%
- Marketing – 30%
- Capital Reserve – 10%
- Legal & Compliance – 5%
The token sale will consist of 30% of all Polkacover tokens that will ever be minted, further details will be announced via the homepage, Telegram account, and blog.
Crypto/DeFi Insurance Products: (Phase 1)
With the rampant growth of the crypto industry, there aren’t any insurance products that sufficiently cater to the Crypto community’s needs. Polkacover is intent on delivering what is needed, and not what has been the standard up to this point.
- Stop-loss Insurance against volatile price drops in crypto markets
- Loss of crypto due to exchange hack
- Loss of crypto due to a phishing attack
- Loss of investment due to fraudulent ICO Loss of crypto due to Wallet Hack
- Loss of crypto due to the token going bankrupt/project abandoned
- Loss of crypto due to mobile/Laptop/storage damage
- Loss of crypto due to exchange going bankrupt
There are two other insurance products with DeFi assets that will be added once feedback from the insurance partners is received. Polkacover will release more product details and policy wordings once the insurance partners receive approval to proceed with the products mentioned above.
The crypto space/DeFi assets space is growing in leaps and bounds but we have yet to see any real insurance providers build insurance solutions around this rapidly growing industry. The volatility crypto participants seek to make gains is a double-edged sword. Although enduring constant price volatility when transacting with digital assets seems routine to the experienced user, protection against the fluctuating price action would benefit most users.
From insurance plans that protect your funds against bad-actors, user-negligence, highly-volatile market conditions, or unexpected events in life, there is no shortage of real-world applications for these much-needed products and services.
By tapping directly into a consumer demographic that is willing to go above-and-beyond to contribute to the business’s success coupled with the strategy to convert a demographic unfamiliar with blockchain technology into a loyal user-base, this represents a significant and unique untapped opportunity. In a world where unexpected events can happen in the blink of an eye, investing in protection from unknown variables and threats seems to be the prudent thing to do – especially in the world of digital currencies, where the stakes couldn’t be higher.
In desperate need of viable and effective risk-transfer solutions (including traditional insurance that goes far beyond protection from hackers and thieves), the testnet of Polkacover’s Crypto Insurance Marketplace in Q1 of 2021 can’t come soon enough.
The Daily Chain
*Disclaimer – Polkacover is our Media Partner, and this content is made possible with their support. The above article does not represent financial, investment, or trading advice, and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.