Alpha development Update: Nsure Network’s Policy Purchasing Module is now officially live!

6 min readFeb 4, 2021

Nsure Labs is thrilled to release its latest advancement: A nouvelle approach towards accessing insurance, having successfully implemented dynamic pricing functionality, security ratings, capital pool support and more! Test now

Dear fellow Nsureans, we’re glad to present you with our latest update on our development roadmap. Nsure Network has now officially added its core feature: Purchasing policies is now available to test on our Alpha environment on Kovan Network.

What does this mean?
Nsure Network users are now able to experience policy purchases under the environment conditions which will be set for our Beta launch. This includes a first sneak-peak into how our unique dynamic pricing model operates and allows for market to influence the prices in which each policy is bought at any point in time.

Dynamic Pricing

As proposed in our white paper, one of the nouvelle approaches we have taken towards building a marketplace for trading risks within the DeFi sector is an implementation of dynamic pricing when purchasing insurance policies, based on real time supply and demand of each product. These are determined by the capacity provided by underwriters willing to take the risk in exchange for part of the premiums paid, the real time demand of historical purchases of policies, and the risk factor determined.
Multiple benefits arise from such an approach, including circumvention of capacity constraints (policies being sold out too fast) as well as allowing the free market dynamics to set a balance on pricing based on any sentiment changes.

A graphic will display at all points in time what the historical daily average price for the last 180 days / since inception of the product:

Here’s an example:
Alice is interested in purchasing coverage for her participation in Compound worth 10ETH for 30 days.

She obtains a quote for her insurance that will cost her 0.018551ETH and the current capacity of Compound insurance policies to be purchased is 320.4549 ETH.

After confirming, Alice can now find her purchased policy under the “My Policies” section:

Now Bob is interested in the same action, as he also participated in Compound with a net worth of 10ETH and decides to cover his exposure:

As Bob is purchasing after Alice already purchased, assuming no changes in Underwriting occurred, a slight price increase can be noticed. Bob will pay 0.019359ETH for the same coverage as Alice, noticeable due to the capacity decrease on Compound insurance policies. Current capacity noted at the right section of the product is currently 309.4549ETH.

As you have noticed, Alice and Bob have purchased the same insurance product for the same amount of ETH and period of time, nevertheless pricing varies between both purchases:

Note: This effect applies when having the inverse action as well; e.g. let’s say Compound just released a new security update audited by a respectable third party vendor and Underwriters are interested in staking additional Nsure in this product.
When increasing the risk willing to be taken by Underwriters and increasing capacity, assuming ceteris paribus applies among policies sold, the price of this specific product would decrease.
In essence, supply and demand applies in real-time for policies sold!

Capital Pool Support

As you may have already noticed on “Purchase”, the main section for purchasing coverage, the capital pool support is displayed in real time as well. This feature represents the amount of capital which is actively participating in the capital pools, which would eventually be available for collateralising any future covers to be purchased.

Active Policy Limit

The Active Policy Limit is aggregating the amount of capital covered across all products; in other words, displaying the sum of all active policies valued in USD.

Policy Mining

Good news for the fans of our Capital Mining feature!
Policy buyers will now officially be able to participate in mining as well, when purchasing coverage.
A dedicated portion of the NSURE rewards, specifically 0.2NSURE/Block will be distributed among active policy holders.
This can be found under the section of “Policy Mining”:

Nsure’s N-SCOSS & Security Ratings

Security Rating is an indicator of the smart contract risk level for each project. It measures the code security based on five perspectives which are correlated to either the likelihood of an occurrence of a hack, bug or exploit (hereafter “attack event”) or the severity of an attack event, parametrised as risk-adjusted factor in the Dynamic Pricing Model and thus affects the premium. The five perspectives are as follows.

1. History & Team: Rating factors examined includes project age, historical attack, team anonymity

2. Exposure: Rating factors examined includes Total Value Locked, type of business, infrastructure

3. Audit: Rating factors examined includes audit transparency and scope, audit results, audit firm credibility

4. Code Quality: Rating factors examined includes code documentation, quality of test

5. Developer Community: Rating factors examined includes bug bounty program, issues raised by community

We grade each perspective with a score ranging between 0 to 100. Weights are assigned to each perspective to quantify its relevance with code security. According to the weighted average, each project’s security rating is determined and symbolised by an integer (1 to 5). Premium rate will go down with a higher security rating project, given other conditions the same.

Reference addresses for Nsure Network Alpha:

Nsure Test Token: 0x6cf83f10234ac1db01baed7e45c52a59c9c66a3b

nETH Minter: 0x536853c65785d71d6b1bed9968f66b94a9233038

nETH Token: 0x536853c65785d71d6b1bed9968f66b94a9233038

nETH Capital Pool: 0x1c1311c5C4E78ce9b1682CB3B2cb29b89DC08F63

How to obtain Kovan ETH:

In order to get ETH on your Kovan Network Metamask, select “buy” on your Metamask interface, which will redirect you to a faucet.

We hope you enjoy this latest release and would encourage any participation during Alpha, welcoming suggestions, improvement proposals or any kind of incongruences/bugs one may come across with, if any.