Today, the first solution to decentralized insurance has surfaced: a project by the name of Bridge Mutual. They’re covering stablecoins, one of the fastest growing markets in the digital asset space, along with smart contracts, exchanges, and more.
Insuring stablecoins, exchanges, and smart contracts has become a necessity in today’s ever-growing digital asset market. With the volume of stablecoins ballooning beyond $20 billion, and the value of loans on DeFi platforms increasing nearly ten-fold, the likelihood of an attack has also increased significantly.
Smart contracts are constantly being tracked by hackers who attempt to exploit them. Hackers send masses of false information to smart contracts in order to have the funds sent to an improper address. Insurance for smart contracts is available, but prior to Bridge Mutual, insuring a smart contract came with the task of revealing one’s identity through KYC. More importantly, there was no way to insure stablecoins or funds on centralized exchanges.
Enter Bridge Mutual
As a platform that has been developing in stealth, Bridge Mutual is composed of financial analysts, lawyers, and insurance experts. The team is launching the first long-term, decentralized, and scalable system of smart contracts that insure crypto-based products and services such as stablecoins, centralized exchanges, and DeFi products.
New participants can join the platform by purchasing BMI tokens and staking in the Bridge coverage pools. Users choose to provide or purchase coverage for stablecoins, contracts, or exchanges they believe are safe. Coverage providers can stake BMI in the pools to offer coverage to others while earning passive yields (i.e. earnings, interest) over time. Additionally, coverage providers share in the profits when users buy insurance from the platform. Purchasing insurance is simple: users can get quotes in real-time and pay premiums directly on the Bridge Mutual site using USDT, DOT, ETH or BMI tokens.
Bridge Mutual covers for events such as crashes in stablecoin prices or smart contract exploits. Stablecoin claims are paid instantly and automatically, while smart contract and exchange claims go through a 3-phase voting process that settles within 6 weeks. Currently, many institutions are forced to diversify their assets across many different stablecoins to mitigate their risk–now that Bridge Mutual is here, these institutions can simply purchase coverage to insure their downside in the event of a stablecoin crash. Crypto users can now have peace of mind and simply use their stablecoin of preference.
How Do Yields Work?
All of the money that is insured through Bridge Mutual stays on-chain. The funds are automatically reinvested through lending platforms run by smart contracts such as Aave, Compound, Curve, and Balancer. Through this cycle, Bridge Mutual takes the yields from those platforms and distributes them back to users automatically. This makes the platform non-custodial, trustless and transparent.
Bridge Mutual separates itself from the competition even further, as the platform is built on the Polkadot network. With Polkadot, users experience a fairer, more sensible transaction fee structure than that of Ethereum-based insurance systems which can sometimes cost users up to $15 to vote on claims due to high gas fees. Since claims are voted on through the blockchain, it is important that the transaction fee is reasonable so as to not turn away users, and maintain voting validity.
Bridge Mutual has fulfilled their angel and seed rounds, and are currently in their private round and negotiating with several large crypto funds. A truly decentralized, scalable and comprehensive insurance platform through Bridge Mutual is launching soon. To find out more, go to www.bridgemutual.io.