Dear Nsureans,
The space is changing so fast so here are some thoughts on a potential model upgrade.
Current Underwriting & Pricing Models can be checked from these links:
Pricing Model https://docs.nsure.network/nsure-network/docs/dynamic-pricing-model
Underwriting and economic Model https://docs.nsure.network/nsure-network/docs/economic-model
Why does coin voting make sense
Coin voting couples the interests and governance power by giving its holders the right to participate in the decision making of the protocol; this theory is based on the economic welfare of the people who hold the governance power to make the protocol successful.
Why can coin voting as ‘Underwriting’ make sense
Underwriting is the most important l part of insurance pricing & risk profiling. The current model of Nsure is designed with the game theory that balances Nsure token holder’s premium as profit and the burning of tokens of potential exploit of the project you stake for as risk.
The new model takes the capacity of the overall capital pool as the most important factor in the system. Coin voting with weights can effectively decide the capacity allocated to each of the protocols.
| Protocol | Votes | Capacity |
|---|---|---|
| AAVE | 500 | 50% |
| Compound | 450 | 45% |
| Newly listed project | 50 | 5% |
The capacity is heavily enlined with the potential profit which is the capacity of selling more on a specific product. The risk involved is that if a specific protocol gets an exploit the maximum loss can be N% (N% is the capacity share of the protocol) of the total capital pool.
Ve(3,3), POL
As mentioned by Andrew Cronje in his article Ve(3,3) ve(3,3). Quick article to explain how a… | by Andre Cronje | Medium It opens a new gate to all projects and the analysis is simple and convincing. As Protocol owned liquidity - POL is getting more and more popular these days. If we want to align interest with protocol governance token owners, then the protocol’s income should also be splitted with protocol governors.
Applying to Nsure underwriting model
| Token vesting term | Each 100 tokens can get VeToken amount |
|---|---|
| 15 days | 100 |
| 60 days | 200 |
| 180 days | 400 |
| 360 days | 800 |
All premiums sold from Nsure platform and staking reward will go to VeToken holders proportionally each epoch.
Protocol owned liquidity - POL will be an option to be determined by current token holders with an improvement proposal.
Simplified Pricing model, Capital model
Pricing model based on N-SCOSS rating will be simplified to 5 tiers with potential exploits frequency and a benchmark price based on current defi insurance model.
MCR will be calculated with the new model, 20% threshold will still be implemented for a single protocol.
Reference:
VeToken:
POL:
Voting, Underwriting tool:
We look forward to hearing your thoughts.