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DEFI insurance and the role of ISM

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Written by   205
5 months ago
Topics: Cryptocurrency, Defi

Blockchain security has always been the concern for every DEFI miner. Whenever the DEFI project contract is exposed to various vulnerabilities, DEFI insurance can always attract the attention of the market, and DEFI insurance has become a necessary investment section for many players.

With regard to the price fluctuations of cryptocurrencies in the bull market, some DEFI insurances are also beginning to introduce new methods. There are currency price insurance policies for mainstream currencies, and the combination of liquidity mining and other different methods has attracted investors' attention. The ISM insurance program on the HECO chain has become one of the most popular projects for investors today, and the total number of pledges on the chain has increased.

ISM is mainly a DEFI project of currency price insurance policy built on the HECO public chain. Due to the fluctuation of currency prices in the market, users sometimes need to hedge against the mining losses of currency price fluctuations on other DEFI projects. The sensitivity of hedging to currency prices is relatively high, so the advantages of ISM are reflected. At present, ISM can claim and unclaim the underwriting tokens . Users can reserve or sell the corresponding tokens according to their own needs. This makes the game more diverse.

Not only that, recently ISM has introduced an insurance broker mechanism, which also makes ISM have more interesting ways to play compared to other insurance projects. So what are the characteristics of this insurance broker mechanism? How can we participate?

ISM Insurance Broker Mechanism Rules

First of all, to register as an insurance broker, we need to need to consume a certain amount of insurance broker stamp, i.e. 2 IMS, and people with steel stamps can invite others to become insurance brokers, and insurance brokers are also divided into different levels, ranging from L0 to L3. People of different levels have different dividend ratios.

In this way, natural insurance brokers will invite more people to participate, so that more users will participate in the ISM , which is extremely beneficial to the increase in the number of users.

Second, the insurance broker has a time limit. The purpose of this is to allow the insurance broker to continue to invite a certain number of users. If the invitation is not available, the time can only be extended by consuming the ISM . Of course, the consumed ISM will be destroyed, so even if the user cannot invite others, it only needs to spend a little more money.

At the same time, the cost of casting the steel stamps will naturally be returned to the upper-level inviter, so that the user and his inviter will reach some agreement, and at the same time, it also mobilizes the promotion of insurance brokers. When users are mining, some of the ISM will flow into the hands of the inviter at the upper level.

What effect will the insurance broker mechanism produce?

There are two main features of insurance brokers. The first part is profit, and the second part is promotion. In the profit part, the insurance broker’s main income comes from two parts. The first part is the management of fund pool dividends, and the second part is an invitation to pay dividends.

It is relatively easy to realize the general invitation of dividends. Since ISM itself is a project of concern for DEFI insurance, this difficulty is not high. There is also a large amount of potential rigid demand in the actual market, especially for currency price fluctuations.

Not only that, rewards are also implemented for inviting lower-level invitees, which is equivalent to a snowballing method. That is to say, under ideal circumstances, if the user invites 10 people, if the ten people continue to invite, they will become 100 people, which means that the superior inviter can be allocated to 8%*10=80 % Profit, and the dividend for inviting superiors is 2%*100=200% , so in this case, the effect is actually very obvious.

In this way, for the insurance brokers themselves, the most effective way is actually to join the insurance brokers as soon as possible, and then use their own invitation channels to invite others.

For insurance brokers’ rewards, the system is very generous, because if the requirements are met, the rewards obtained are very generous. This part is clearly marked and everyone can see and participate in it. If it produces a certain effect, That way, a large number of new users have been acquired.

For insurance brokers who have not actually completed their tasks, the system also provides downgrade or preservation measures, such as destroying them to meet standards. Because user invitations are mainly concentrated in the early stage, this kind of degradation will also be concentrated in the later development. With the increase in the number of invitations, this may usher in a relatively active level for the overall ecology of ISM .

Of course, this kind of invitation will become a little more difficult in the later stage. This is like the three major exchanges inviting rebates. When the market is sufficient, its own users have a certain demand, so they will naturally get insurance from the invitation. However, as the number of people increases, the number of new users will naturally decrease, and insurance brokers may decline in order to rank, so that the destruction of ISM advantage appears.

However, it is certain that the method of destruction has enabled ISM to obtain important value support in the entire system. From the perspective of market supply and demand, the reduction in the number of tokens is bound to be an obvious advantage for ISM .

ISM 's advantages over other insurance products

At present, there are also some insurance-related projects that have a certain test reference, such as helmet , Nexus Mutual , Cover Protocol, etc. Although they all have certain advantages, compared to ISM , there may not be many competitions.

Nexus Mutual is a pioneer of DEFI insurance, and it belongs to the insurance of smart contract security. Although the amount of lock-up is currently ranked high, Nexus Mutual needs community voting to determine whether to pay, and this efficiency will be reduced a lot. In addition, Nexus Mutual is against tokens. There are also requirements for holders and insurance projects, so not everyone can participate. At present, most exchanges can only list the synthetic asset for NXM- WNXM , which is precisely for this reason.

Helmet , as another project , still seems to have some similarities with ISM . Helmet currently has HORT Token  and SHORT Token , but LONG Token  cannot be mined, which is still somewhat disadvantageous compared to ISM .

Cover Protocol  's model is also very similar to ISM . In addition to setting up two policy tokens, it also supports many popular projects such as 88mph , AAVE , SUSHI, and Badger  . However, cover has been exposed to vulnerabilities before, so participants also need to be cautious.

At present, ISM is a very good choice for users to participate in price insurance. The insurance broker mechanism is particularly attractive to users. This can quickly acquire a large number of new users. Of course, for DEFI insurance, ISM 's imagination is still very rich.

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Written by   205
5 months ago
Topics: Cryptocurrency, Defi
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