Mainnet Launch: Stage Two, Underwriter Module release

NSURE NETWORK will launch Staking functions as an Underwriter, expected to go live as of April 7th 9:00AM UTC.

7 min readApr 7, 2021

Dear Nsureans, we’re thrilled this time, to bring you our latest development update: Underwriting on Mainnet is now live!
You can now underwriter all batch 1 products added into the Nsure Marketplace, and commence underwriting with your Nsure tokens, and get ready for the grand slam release of Stage Three, where Purchasing policies will go live in the coming days.

Access to Underwriting on APP here

Underwriting Module:

As you may have already read on our white paper or different media outreaches, underwriting insurance plays a central role in our platform. Traditional insurance models, as well as our own approach would not be able to function sustainably without Underwriters, risk-taking parties that provide capacity by influencing the supply-side of insurance products.

Our approach for Main-net launch bases it’s functionality on incentivising Underwriters with part of the premiums paid from policy buyers associated to the products one has decided to obtain exposure to; in other words staking NSURE tokens in exchange for a share of future earnings sourced from premiums, paid in ETH or stable coins.

Batch 1 of supported Products

Lets dive into the mechanics of the Module:

  • 20 Insurance Products listed, to choose from (Pools)
  • Rewards for underwriters paid in $ETH sourced from premiums
  • Boosting rewards to incentivise liquidity bootstrapping in $NSURE
  • Dynamic Pricing Model
  • Leverage: based on Security rating and Diversification

Reward structure

In the Module, users will be exposed to the movement of capital demand and supply. Such movement will impact the equilibrium price for policies , i.e. premium, and $NSURE tokens distributed as incentive boost.

Rewards in $ETH for Underwriters will kickstart with the launch of stage three of Mainnet release, which will come soon after liquidity on the supply side of the underwriter module is considered mature enough. Expectations are that we will be launching this last stage few days after Underwriting is live.
From the products you decide to underwrite on, 50% of the premiums will be distributed evenly among participant in the underwriting of this specific product, according to your stake.

Rewards in $Nsure will will go live on April 10th, 11am UTC, in synchrony with the conclusion of the prior Underwriter program Simulation.
The reward rate will be matching the previous program, at a rate of 5,760 tokens generated daily.
These will be claimable on a daily basis, and executed via snapshot, you will be able to track these from the Underwriter dashboard.
As the main intention of the boost is to additionally incentivise potential underwriters, these will remain active for the first stages of mainnet, until the platform has matured enough and participants are sourcing sufficient rewards from premiums out of sold policies.

Underwriting Conditions

Underwriters are essentially the counter party in the platform, stepping in as risk takers providing capacity and liquidity for policies to be sold, by underwriting risks that each participant is willing to underwrite.
In order to maintain a fair balance between the rewards obtained by underwriters, following conditions are set:

The overall staking requirements and rewards are influenced by the Capital Model used as backbone in the platform model, which takes into account the correlation between different insurance products. Nsure holders may choose to stake on as many as interested, and so contributing to the available capital pool, thereby the greater risk taken may potentially result in earning higher returns sourced from premiums.

In the event of a successful claim, a set percentage of the total claim amount paid out to policy holders, equivalent in Nsure tokens staked on a specific product that underwent a payout will be deducted and burned as means to share losses resulted at platform level. The amount is calculated based on the total capacity as follows:

Any Nsure tokens deposited and utilised for underwriting will undergo a 14-day cool-down process, when requested to be withdrawn. During this period, Underwriters will not be eligible for rewards (in Nsure), while still being exposed to claim payouts.
Reasoning behind this condition is to prevent any kind of malicious activity in the case of an exploit being spotted in regards to any product, hereby mitigating means to outsmart the system, and preserve fairness.

Here’s an overview of the model implemented in the platform, including underwriters:

User Guide:

To start underwriting, make sure you have Nsure tokens in your wallet.

The first step of underwriting is to deposit the Nsure tokens into the underwriting smart contract. Once the depositing step is done the total Deposit “staking power” will appear under the “Holdings” section.

Note: You will first need to Approve the contract in order to deposit tokens.

Secondly, identify protocols attractive to your risk/reward appetite & provide coverage capacity as an underwriter (Tip: Security Rating and the risk assessment map may help you to analyse potential candidates for your underwriting portfolio)

In order to start underwriting, you can set amounts on desired products on the right hand side, where the platform will indicate you the maximum staking power you can utilise on every product based on your available balance and correlation.
At the bottom of the page, you can confirm the chosen picks and execute via signing a transaction with your wallet.
Note: this process is free of fees and will not encounter any transaction cost from your wallet.

Different from the Underwriter Program, which you might have been familiar with, the leverage granted to each underwriter is not a constant level but based on his actual portfolio. Leverage could be increased by staking across more less-correlated and higher rating products, to lower the staking power used.

Staking power used is calculated by the formula below

Where RF(i)*EX(i) is the Leveraged Staking for project i, and Corr(i,j) is the correlation coefficient between project i and j. The leveraged staking is the product of your real staking in one project and the leverage factor for this project.

The introduction of leverage factor is to credit low risk project by encouraging more staking on them as they consume less staking power from underwriters, and vice-versa. The existence of correlation between projects accounts for the following facts in DeFi industry.

1) Developers forks or refers to existing projects’ code so there is similarity among projects

2) Out of the similarity in structure, projects of same business type tends to be vulnerable to same hack method

3) Projects could share oracle risk if they are fed prices from the same oracle

4) c risk out of the lego structure of DeFi — collapse of underlying project fails the upper level projects, especially for projects with announced collaboration

After adding staking into your selected projects, click “Confirm” and the staking power left & leverage used will be calculated. An error message will pop out if you overuse your staking, so you could either lower your staking or diversify it into more projects.

Lastly, monitor your portfolio returns and rebalance from the “My Portfolio” section.

You can check your staking provision under “My Portfolio” section:

Note: In order to withdraw, you will have to unstake the desired tokens from underwriting products, which would prompt these into a 14-day lockup period mentioned above. Once the cool down period is concluded, you will be able to withdraw idle tokens from the underwriter module. Rewards are claimable anytime.

About Nsure Network
Nsure is an open insurance platform for Open Finance (DeFi). The project is inspired by Lloyd’s of London, a market place to trade insurance risks, where premiums are determined by a dynamic pricing model. Capital mining is implemented to secure the capital required to back the risks at any point of time. To learn more about Nsure Network go to Nsure.Network or follow us on Twitter or Telegram.

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