Tranchess X InsurAce AMA Recap
We were delighted to welcome Dan, Director of Business Development & Marketing, and the InsurAce team for an AMA on our recent partnership for insurance coverage. InsurAce is a top tier DeFi insurance protocol that offers protocol-wide insurance for users, providing additional sense of security. We discussed many topics including the role of insurance in the DeFi landscape, how it functions, and much more. Some of the key questions answered were:
- How does insurance coverage work?
- What are the different insurance offerings?
- What is the key selling point of InsurAce?
- What does the $INSUR token do?
- What is InsurAce’s liquidity mining program?
- How does InsurAce identify partners and does InsurAce do their due diligence on these protocols?
- What qualities does InsurAce look for in a partner?
Tranchess: Tranchess King (@Tranchess_King), Tranchess Gambit (@Tranchess_Gambit)
InsurAce: Dan (@vagrantcrypto)
King: Hi Tranchess community~. We’re excited to host InsurAce today for AMA! As many of you might have known, we have partnered with InsurAce to offer you insurance coverage with a mere premium of 2.5% of total assets insured. This is a testament to the security of Tranchess, calibre of investors, and quality of the team overall.
Today’s AMA will have 2 segments: Segment 1 would allow us to understand InsurAce better through an introduction/Q&A session with Dan. Segment 2 will be an open section for anybody to ask questions about InsurAce!
Without further ado, Let’s first intro our limelight of the AMA, Dan from InsurAce!
Dan: Hi guys, thanks for having me, great to meet everyone!
King: Glad to have you here with us today on Tranchess TG, Dan. In fact, you are the first protocol ever to be doing an AMA with us on our TG channel.
Dan: Haha no way! How exciting! I guess we’ll have to keep things spicy and get some champagne flowing.
King: Ok then, let’s get this going. Could you please give us an introduction of yourself/team and what InsurAce is before we move to segment 1?
Dan: Absolutely, I’m Dan Thomson, the Director of Business Development and Marketing for InsurAce. I am originally from London, have lived in Spain previously and now in the Americas. I have a background in growing companies across Europe and have been in crypto since 2015 when I bought my first Bitcoin. Since then I have gone on to launch one of Europe’s first crypto Index Funds based out of Gibraltar, and then moved into DeFi which is when I came across InsurAce and the DeFi insurance sector.
The rest of the team is mostly based out of Singapore, with some other decentralised individuals on our BD team.
InsurAce is a DeFi insurance protocol protecting your assets from hacker attacks and bugs in smart contracts that may result in losses to your assets, we also cover some custody insurance for funds kept on exchange, as well as Stablecoin De-Peg events, and IDO events. From as little as 2% you can guarantee your assets’ security and have peace-of-mind.
We will be adding more types of insurance in the future including Rug-Pull, Market Volatility, NFT insurance amongst others.
King: Nice! Thanks for the detailed introduction Dan! Moving on to segment 1…
King: Q1- Could you explain how InsurAce insurance coverage protects its users?
Dan: Decentralized insurance works by sharing these riske between many users, insuring their assets on many protocols, as well as stakers (underwriting miners) who are incentivized by high yield rewards for providing liquidity. The rewards are generated from both the premium income and also investments made by the reserve capital in the liquidity pools.
This all helps to give participants greater rewards, whilst reducing the overall premiums paid by the end-user.
In the result of a hack or a bug, where funds are lost in one of the protocols, then the users can simply submit a claim through our protocol and our token holders govern the decision on whether the claim is legitimate or not.
Even with audits and bug bounties, protocols have still been hacked. Even with the best teams and investors. Over 10 billion dollars has been lost in 2021 due to this. Up from 120 million in 2020.
The only way to mitigate this risk is with insurance.
King: That’s really a large amount of funds being lost…other than improvement in protocol security, it’s definitely important to have insurance coverage from this angle.
Q2 — What are the different kinds of insurance coverage InsurAce offers?
Dan: Our coverage is against smart contract hacks and bugs at protocol level. Underlying faults, including oracle failures are not covered at the moment. In the future we will be adding a de-peg insurance coverage to this product.
I don’t want to ramble on about this too much as there are a lot of specific events we could discuss.
Full cover wording can be found here for anyone who wants to dig deeper: https://files.insurace.io/public/en/cover/SmartContractCover_v2.0.pdf
King: Thanks for the document Dan! I guess everyone is also asking about USP and differentiation…
Q3: What is the unique selling point of InsurAce?
Dan: It’s a question we get asked a lot. There are a lot of insurance options emerging lately, but the space is enormous so the general sentiment is collaborative instead of competitive.
InsurAce is a leader in DeFi insurance, we are only six months since we went live on our mainnet and we are the only protocol to have deployed on both eth and BSC smart chains as well as Polygon and avalanche. This comes after we launched our multi-chain services allowing for users to insure their assets on 9 other chains like fantom, Solana, and arbitral.
Also we have no KYC.
We offer the lowest insurance premiums on the market, up to 60% cheaper than our competitors and up to 50% less on gas fees too, by using our portfolio based insurance model. You can insure all your bags together instead of separately to make these huge savings.
Also, our governance model is different from our competitors. We have advice from insurance experts who help to govern claims and insurance services that we offer to allow for a more streamlined and knowledgeable decision making process when it comes to both offering insurance and also processing claims. We have an update to this coming up soon with a 2-dao governance system too!
Finally, our upcoming investment model will allow for users to opt between high and low risk investments for higher or lower yields. This will use our capital reserves more efficiently to achieve higher gains on our capital which will benefit our stakers, insurers and insurance customers.
King: Different tranche of risk for varying returns is always interesting 🙂 Something which Tranchess is familiar with as well!
Q4: What is the $INSUR token and what are its use cases?
Dan: The $INSUR token is our governance token and rewards token. In the future it will also be available to purchase insurance services, as well as special offers and reduced premiums for participating in the community.
It allows holders to get involved in decisions like the claims process.
As well as occasional benefits and airdrops 😉
King: Understood. that’s a good use of the token. Maybe just to continue also on similar vein ~
Q5: What is InsurAce’s liquidity mining program? Could you elaborate on how it works?
Dan: Our liquidity mining program is our version of opting to provide liquidity to the Decentralised Exchanges we work with to help facilitate transactions on the DEX at a fair price.
It is different to our regular Mining which is our version of staking, allowing users to earn rewards for providing capital that helps boost our insurance capacity.
Users should check out our underwriting mining (staking), for some tasty tasty APYs 40+%. If you stake with us there is a calculation you can do to work out that you can actually mitigate the cost of the insurance altogether, because the returns from your stake will be higher than your insurance costs.
King: Nice angle to look at coverages! Moving on to partnerships…
Q6: You’ve been having many partnerships with top tier DeFi protocols. Does InsurAce do their own due-diligence on the security of their partners? If so, could you provide an overview of what you look out for?
Dan: Yes, so many partnerships, it’s been a great few months. Over 90 protocols are now listed for insurance on our app.
We do our own mini-audit on each protocol we list on our app. There are a few minimum requirements, for example a minimum TVL of $10m, and a live product. Our risk assessment goes further than audits in the fact that it checks out the communities, teams, and investors too.
This allows us to create an internal security rating which is reflected in an insurance premium cost of usually between 2–5% annually.
Which sounds like a lot, but when you can be earning 30–40%+ in DeFi, it is really only a small price to pay for the peace of mind.
We produced a recent blog post on everything that we look for in a risk assessment, which can be found here:
King: Definitely interesting to see coverages vs yields in return perspective. Another question regarding partners…
Q7: What are some qualities that InsurAce looks for in a partner i.e. how can a protocol help its users get insured?
Dan: It’s a good question! We do not list every protocol we come across or get asked to look into.
Sometimes its as simple as the mainnet not being live yet, or a low TVL other times we identify some larger risks and red flags. These could be inactive communities, low quality audits, or anonymous teams.
Luckily, sometimes these aren’t the end of the road and the project speaks for itself. Which is why we are here today.
Tranchess is a great example of a pseudo-anonymous team that has developed a great product that we are happy to partner with.
King: Many thanks for the vote of confidence mona mi!
Dan: Teams and protocols themselves can help users to adopt insurance through marketing and AMAs like this, through adding links to insurance at the time of purchase, and also working with us on our upcoming API allowing for 1-click insurance like travel insurance on a flight.
Also helping us to change the narrative. The current perception is that each protocol HAS to have an audit. Insurance should be included in that narrative too.
Fundamentally, if a project has a good score on DeFi Safety, and we believe they are building for the future and the long term, then they are a project that we want to work with.
King: Got it. Many different angles from InsurAce perspective to assess the different risk and blindspots. Thanks very much Dan for covering swiftly Segment 1’s questions.
Moving on to Segment 2. If everyone on the chat is ready to field your questions. Gambit, if you can do the honour…
Gambit: Chat is now open for questions!
Q1: How will tranchess and InsurAce work together? Wwill our funds be insured, e.g. when tranchess starts to use other protocol? (@Orcanaut)
Thanks, this is actually a great question.
The insurance covers the tranchess smart contract. So, in the event of a hack on Tranchess, your funds would be safe.
If the funds are separately allocated to other protocols, there are insurance solutions for the Tranchess team to adopt to cover those staked assets separately.
Q2: We recently notice that the BSC chain offering for Tranchess is out of stock! can you top up please? (@TmHens)
We will be increasing capacity very soon! Just shows how popular it has been. We have capacity on other chains which you can use to buy the insurance and it will cover Tranchess. We are deployed on Ethereum, Polygon and Avalanche too as well as BSC
Q3: Going forwards, when Tranchess goes multichain and increases underlying assets, how will InsurAce maintain the upkeep given the massive potential for TVL growth? Will InsurAce have the capacity then to increase the coverage pool for Tranchess? I see that the coverage is already sold out, so demand is super high! (@Thirty_three_33)
We can cover 12 different chains already, so when Tranchess goes multi-chain, we are ready for it!
Our capacity issues can be solved by working with the Tranchess team to help us increase the capacity for the Tranchess specific capacity on our app.
Q4: How long have Tranchess and InsurAce been working together? (@psixolag7)
DeFi is all about collaboration. As discussed previously in other questions, we can increase our capacities to help protect as many users as possible.
You can check out our partnership announcement from October here: https://blog.insurace.io/insurace-io-announces-strategic-partnership-with-tranchess-the-yield-enhancing-asset-tracker-c769ac8c0c17
King: Thanks everyone for your questions, and of course thank you Dan and the InsurAce team for being here with us today. We look forward to our continuous partnership together and wishing you and InsurAce team a strong & steady growth path ahead~!
Definitely will be happy to keep up to date with the exciting plans InsurAce has ahead. Please do keep us update Dan !
King: And just an extra, InsurAce has offered to give all the people who asked wonderful questions 30 $INSUR! We will contact those whose question @Vagrantcrypto answered to retrieve your BEP20 address and forward it to the InsurAce team.
Dan: My pleasure, thanks @Tranchess_King @Tranchess_Gambit for having me!
For those interested, please do follow us on Twitter, and join our telegram or find our other links here:
Post InsurAce AMA: Following the massive demand for insurance coverage, InsurAce added an additional 2 Milllion USD worth of coverage on BSC for Tranchess as well!