On January 14th, 2021 tehMoonwalkeR Group hosted an Ask Me Anything with Mike Miglio CEO of Bridge Mutual.
Below is a transcript of the questions and responses.
Please be so kind and introduce yourself and talk about your role in the project
Sure, I’m a crypto attorney in the space that also founded a crypto-only law firm 4 years ago servicing projects and exchanges that needed help navigating U.S. crypto regulations. We serviced clients like QTUM, Akropolis, Gate.io, NOIA and many others.
Now I’ve left that life behind and I’m full-time CEO of Bridge Mutual, my role is to make sure that Bridge succeeds in becoming the next primary platform for decentralized insurance.
What is Bridge, why do we need it, what does it solve, and how does it work?
Fully explained, Bridge Mutual is a decentralized, dao-managed, permission-less, p2p/p2b discretionary insurance platform that allows users to provide or purchase coverage for smart contracts, centralized exchanges, stablecoins, and other centralized crypto service providers.
It helps to solve the problem of people losing funds at no fault of their own (hacks, exploits, bugs, rugpulls) when they entrust those funds in a smart contract, on a platform, or in a stablecoin. There are 2 types of users: Policy Holders (PHs) purchase insurance policies off of our platform in exchange for stablecoins. Coverage Providers (CPs) provide their funds to back those policies, and their funds are used to pay out successful claims. CPs get to choose what assets they want to back, and in exchange for risking their funds, CPs are rewarded handsomely with yields, profit sharing, and the ability to make additional income by voting on claims.
More products will come late this year. One of the many unique things about our system is that users will be able to add ANY contract to our platform to be insured without the approval or permission of the team — kind of like how Uniswap works.
Can you explain this in words a nocoiner would understand? just in case there lurks someone inhere
The people are becoming the insurance company. You put in money or you buy a policy. If you put in money, you get rewarded. If something gets hacked and you have a policy for it, you get money back if everyone agrees that the event falls into policy guidelines.
Right now, in the “real world”, people pay insurance companies funds and the insurance companies choose when to pay out on policies. This process is naturally adversarial and often results in unpaid claims or expensive lawsuits. The insurance industry itself hasn’t evolved or been disrupted in centuries despite the great advancements in technology humanity has enjoyed.
Through blockchain, we can create open and transparent systems to nearly ensure that all claims are adjudicated and settled in a fair way. Soon after its creation, Bridge Mutual will transition into a DAO wherein the platform is totally autonomous and it can only be altered by the people that own its tokens, then it will belong to the people to insure the people.
I don’t know if that made it any more simple.
Lets talk about the token, what is the benefit of holding it? and what can i do with it?
When we launch our platform will be version 1.0. Version 1.0 aims to be bulletproof, so it’s more simple. We’ve already got a large chunk of the math and design done for version 2.0, but the launched version needs to be simple to avoid getting exploited.
The BMI token will have a few functions as a staking mechanism, a reward to boost APY, an asset that is required to vote on the system (which is a way of earning more money), and later as a governance tool. There is also a token buy-back system integrated into our business model for price support.
There are plans to add more functionality to the token, but I can’t disclose those details right now because it’s too early.
We will also have 2 types of NFTs and both of them will have unique utility, they won’t just be art work. I can’t really go into detail on the NFTs publicly yet.
Many projects struggle with liquidity and volume short after launching, any plans for LP campaigns or similar?
We’ll be having a liquidity mining event that is incentivized with tokens but also some of those NFTs I just mentioned. The NFTs will be highly coveted, very rare, never printed again, and they’ll actually have a use case on the platform. If our platform lasts for 2–3 years, the value of those NFTs will be significant. Liquidity provided in the event will be used to bootstrap the system; the system will also have increased APY in the early stages to encourage involvement.
Sounds very interesting, can you tell us more about the NFTs?
I can’t say too much. There will not be that many given away, they will be given to the addresses that provide the most liquidity, but there ways for people that do not have a lot of money to also acquire these NFTs. Some will be given away at random to anyone that participates.
The NFTs will have different rarities as well, and the rarer ones have unique effects or increased power compared to the more common ones.
We’re also partnering up with another project for the NFTs. That will bring a lot of hype to them because said project is a big deal
Im def. intrigued what about partnerships, any you can disclose yet?
We’re on the verge of announcing 4 project partnerships right now, with 4 more being developed. We’re also in the middle of talking one of the Chief executives at one of China’s top 3 insurance companies and, separately from that, a NYSE traded company that wants to explore possibly integrating platform and selling the platform’s products to their users once the platform is live. There’s a lot of things going on.
I think the only public “partnerships” right now are Zokyo (the same auditing firm that audits YFI) and spotlights on our advisors, like Tyler Ward (co founder of barnbridge.com) and Michael Terpin (owner of Transform Group).
Lets talk about the roadmap, whats coming in the next weeks/months?
Our TGE + Polkastarter IDO + Uniswap listing is all happening on January 30th.
The next major milestone event happening after this will either be our Liquidity Mining Event or CEX listing (it depends on which ends up happening first).
2 to 3 weeks after the Liquidity Mining Event we will launch v1.0 of our platform.
There will be many things to come after that, including v2.0 of the platform, the phone app that we’ve already started working on, more partnerships, more products (traditional insurance related), and the gradual transition into a DAO.
Anything you like to share with us?
Hmm.. I think there’s a lot. I talk about the project so much that I genuinely forget what I have and haven’t said yet. It blends together in my memory.
The important thing to note is that this aims to be the most decentralized insurance app of all of them. There are substantial and meaningful differences between Bridge and the rest of the competition. For example: 1) there’s a built-in reputation system; 2) most other protocols out there have a centralized layer that can reverse votes and punish users, centralization isn’t DeFi even if the platform has DeFi elements; 3) any person can add any smart contract to our list of coverage pools, in other projects they have to be manually added by the team after getting approval; etc.
check us out :)
There is a company called Polkacover launching soon, how do u feel about them as a competitor?
They’re great, and they’re not a competitor. They focus on traditional insurance, we focus on DeFi/crypto/exchange insurance. More importantly, DeFi needs multiple insurance platforms. The reason for this is that insurance platforms can insure each other and create a safety net that is propped up by each other. We don’t intend on being the only platform.
Will I be able to bet on events/take out an insurance without even having the exposure to the risk factor?
This is unlikely. The system runs on Proof of Loss. Users are instructed to deny claims if they feel that there is no actual evidence that the user has suffered a permanent loss. Likewise, if a user experiences a loss but is reimbursed (for example, if binance gets hacked but then binance pays everyone back) then they won’t be able to make a claim and receive additional payment on our platform.
What sort of premiums will be payable for insuring a $1m portfolio for example?
Premiums vary from product to product and are altered by multiple factors. I wouldn’t be able to quote you here. There also needs to be enough coverage in the pools you’re looking to insure to cover these investments. For example, if a brand new project comes out and you take a $1m position in it, anyone can add that project to our platform within minutes of it launching, but the odds of there being $1m worth of coverage in their pool that quickly is low.
We do have a lot of incentives for projects to add their own capital to their own insurance pool, including shield mining. Shield mining lets projects incentivize Coverage Providers to add liquidity to their insurance pools by rewarding them with native tokens from the project.
How will you handle scalability and multi chain communication?
The platform was designed to be able to scale infinitely. I think the biggest problem with scaling will be keeping organized. We are already working on solutions to index the platform so that users will have an easy time navigating through all its potential products; and systems for flagging and potentially removing clones of projects.
Cross-chain coverage is easy and already implemented. You will be able to insure any asset on any chain.
What is the expected APY for providing liquidity? What happens with the funds? Do they acquire yield in some form, or are they pooled and stay ready if something happens
We are shooting for “high”. We realize people have other options out there for farming. Our system automatically takes a large portion of its excess funds and re-invests those funds into other yield generating platforms (aave, curve, etc.) to produce additional yields for our users. Users are additionally awarded BMI from our system. The APY will be kept competitive and adjusted to maintain its appeal. If a successful claim happens, we will attempt to pay it with the funds still on the system. If those are not enough, we pull funds off of platforms to cover the balance.
What insurance options will be offered? Like if your own wallet gets hacked, how will you adjudicate if there was a bad actor?
Smart contracts, stablecoins, exchanges and crypto services (like custodians). All hacks, exploits, theft and rug pulls will be covered.
Personal wallets are not covered. What I mean by that is that if someone hacks your meta mask or Ledger, this is not something we have insurance for. The reason for this is that it’s nearly impossible to verify that the user did not “hack” himself and steal his own funds to make a claim.
How are the claims being handled within your ecosystem? Who takes care about them? How do you prevent any sort of human manipulation that could affect the validity of the claim?
The system uses a combination of 1) blind voting; 2) rewards and punishments; 3) required staking; 4) a reputation system; and 5) an appeals system.
I can’t go into detail about how all these things work because we do not want to be copied before we launch, but the system is pretty clever in making sure that people stay honest. It can cost you money if you vote in ways that are dishonest or if you try to game the system. All of the incentives are natural, there is no centralized layer enforcing the rules or punishing bad actors.
Can you please tell more about the response time about the resolution of claims with Bridge Mutual? Is this somehow depend on the type of issue or is it dependable on the complaint?
Claim resolution times range from instant to 45 days. For centralized exchange insurance, we may even prolong this to something like 90 days. But the timing is set. Right now, it is impossible for a claim to exceed 45 days at the longest, but it can close much sooner than that depending on how the votes go.
Several insurance platform such as Cover Protocol experienced smart contract exploits recently despite claiming to be protectors for smart contracts. How can we trust insurance projects such as Bridge Mutual? Are the funds held in smart contracts?
Our devs are the same devs that run Zokyo, one of the most widely respected and advanced auditing firms. Likewise, we are getting audited by Consensys and other top-tier auditors.
Aside from that, Bridge Mutual is implementing a way to cover itself and reimburse its users in the event of an exploit. Yes, the funds are all held in smart contracts, the team has no control over any funds within the system.
It should be well understood by now that there is always a risk, however we are confident in what we are making and the system will only be launched when we think it’s bulletproof.
What makes the users of Bridge Mutual qualified to earn passive yields on your platform and actually share the profits while people are purchasing the insurances? Are there any specific requirements for this?
Any providing coverage (locking stablecoins) earns passive yields. Anyone staking BMI earns passive yields. You do not have to vote or be an active member on the system to earn yields.