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Deep Dive into Polkadot’s Prime DeFi Insurer

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In Q2 2021, PolkaInsure’s mainnet will be launched and the PIS token will migrate from Ethereum to the Polkadot ecosystem.

By now, nearly everyone has heard of decentralized finance. The growth of this exciting blockchain sector has gone parabolic since mid-2020, when the total value locked in DeFi products rose from under $1 billion to over $27 billion, today — and for good reason.

The blockchain and cryptocurrency industry is finally realizing some of the promises made in the Initial Coin Offering boom of 2017 and 2018 — namely, providing decentralized access to the financial system to anyone and everyone, without the need for traditional finance and middlemen taking their cut. By decentralizing finance, users are able to take advantage of higher yields on their savings accounts, take out fully collateralized loans, receive instant payouts, and realize many other benefits.

That said, DeFi has not been without its flaws. In the race to be the best DeFi platform, many projects pushed through faulty smart contracts that resulted in massive losses from hackers and back-door exploits. Without proper code audits, various projects have already mishandled large amounts of user funds.

Enter DeFi Insurance

Ethereum, as the leading DeFi blockchain, already has decentralized insurers in the form of Cover Protocol and NSure Network. However, Ethereum’s scaling issues and high fees have pushed many users to Polkadot — where PolkaInsure is poised to be the leading insurer.

What Is PolkaInsure?

PolkaInsure is a decentralized peer-to-peer insurance marketplace specifically for users in Polkadot’s DeFi ecosystem. It allows anyone to either request insurance or provide coverage, thanks to its decentralized nature and governance.

Users do not have to go through lengthy Know-Your-Customer procedures to participate in the insurance marketplace, and payouts are instantly handled by smart contracts. Said smart contracts also ensure that insurance contracts are fully collateralized.

Though shoddy smart contracts are somewhat prevalent in the DeFi space, PolkaInsure has been audited by Arcadia Group, and external auditing firm — ensuring that the code is free from critical bugs, backdoors, or security flaws. The results from Arcadia Group are available on the firm’s website.

As implied by the name, PolkaInsure will fully migrate to a Polkadot parachain when development has completed. As of now, PolkaInsure’s token, PIS, is issued on Ethereum — due to the high level of demand for the governance token.

Tokenomics behind the PIS Governance Token

The PIS token is the governance token of PolkaInsure, in the same way UNI is the governance token of Uniswap, YFI is the governance token of Yearn, AAVE is the governance token of Aave, and so on.

The supply of PIS is capped at 100,000 tokens and distributed as such:

  • 30% is distributed to the token’s public sale.
  • 30% is distributed to add liquidity on Uniswap.
  • 20% is distributed for shield mining.
  • 5% is distributed to founders and the project’s team.
  • 10% is distributed via private sales.
  • 5% is distributed for marketing purposes.

PIS tokens will sell for $1.40 per token in the private sale and $1.80 per token in the public sale. Tokens sold in the private sale will be locked for a period of four weeks.

Earn Rewards through Deflationary Farming and Shield Mining

PolkaInsure’s deflationary PIS farming is already available on Uniswap and involves the farming of the governance tokens without new tokens being minted. This is done by staking PIS Uniswap liquidity pool tokens into the PolkaInsure farming protocol, where a fixed supply (30% of the total supply) is distributed. These tokenomics are in place in an effort to drive the price of the token higher as time progresses.

This model also allows users to earn rewards in two ways:

  1. Users may temporarily share transaction-fee rewards from users who trade PIS on Uniswap until PolkaInsure launches its mainnet, at which point Deflationary Farming will migrate to Polkadot.
  2. After the migration, users will also be able to earn rewards via Shield Mining.

PolkaInsure’s products are already launched on the Moonbeam testnet, the Polkadot Network’s smart contract parachain — illustrating that the initial steps for Shield Mining on Polkadot have already been taken.

PolkaInsure has also partnered with Value Liquidity (VALUE), a popular DeFi platform for staking and farming. Two launch pools will be available — PIS-ETH and PIS-USDT — on Value’s Farms-as-a-Service (FaaS) platform. The partnership sees the products being tested on Moonbeam.

PolkaInsure’s Plans for 2021

The PolkaInsure team has a full schedule lined up for 2021 after a strong finish to 2020.

In Q3 of last year, the PolkaInsure team conducted extensive research on DeFi insurance protocols and the Polkadot ecosystem before forming its team. Afterward, in Q4, the tokenomics were established and development began on PolkaInsure’s smart contract.

Now, in Q1 2021, PolkaInsure contracts are continually being developed and readied for deployment. This is also when the token sale will be completed and deflationary farming will be launched. More DeFi projects will be onboarded onto PolkaInsure as efforts to secure partnerships, market aggressively and establish brand authority are underway.

In Q2 2021, PolkaInsure’s mainnet will be launched and the PIS token will migrate from Ethereum to the Polkadot ecosystem — which will allow for the launch of shield mining. As more projects are onboarded onto PolkaInsure, more DeFi projects in the Polkadot ecosystem will be protected.

Why PolkaInsure?

DeFi’s upwards trajectory is clear, but scaling issues are hamstringing Ethereum. Because Polkadot is proving to be a prime competitor, opportunities on the competing blockchain may provide more upside than from those on Ethereum. Because decentralized finance is inherently risky, the importance of DeFi insurers on Polkadot will not be overlooked — making PolkaInsure an exciting project in a strong position for future growth in the sector.

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Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.



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DeFi

How Could It Affect Bitcoin?

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While the COVID-19 pandemic has slowed down markets worldwide, especially the US stock market, several investors and traders went after alternative assets and options that could provide them a better store of value.

The United States Senate approved by a 50-49 party-line vote a $1.9 trillion coronavirus stimulus check, a plan already announced by Joe Biden at the beginning of January. This COVID-19 package relief includes the third round of stimulus checks that will be passed to president Biden, with a deadline of March 14 to make changes to the package before Biden gets to it.

What Does the COVID-19 Package Relief Plan Provide?

The COVID-19 package relief will include a series of direct payments to help boost the economy, hit by the coronavirus pandemic in 2020:

  • Americans making over $75,000 per year will receive direct payments of $1,4000.
  • Jobless Americans will receive $300 per week
  • Couples who make over $150,000 will receive $2,900 as a household check
  • One year increase to Child Tax Credits, which is a tax credit check that could be worth up to $2,000, depending on the income of households.

Why Is This Vital for Crypto?

  • Investing in crypto: Americans are one of the most active cryptocurrency advocates in the world. While financial institutions and politicians are still debating and giving uncertain weather for cryptos, a good percentage of the population are trading or investing in them in some way, especially, Bitcoin. If Americans who received the check start using that money to invest in cryptocurrencies, the crypto market would likely see a boost by mid-year.
  • Inflation: Stimulus Checks also mean more money issued —meaning, more money printed. The more money is printed, the higher the inflation as the value of fiat decreases. This is also another vital point for Bitcoin and most cryptocurrencies.
  • Hedge against inflation: While the COVID-19 pandemic has slowed down markets worldwide, especially the US stock market, several investors and traders went after alternative assets and options that could provide them a better store of value.

When institutional investors and companies, like PayPal, Grayscale, and Tesla, started hoarding Bitcoin, many realized that BTC together with several altcoins, changed from just being a medium of exchange to become a better hedge against value decreasing fiat.

While the weather in the US is uncertain regarding cryptocurrencies, this would likely act as a boost for most digital assets, reaffirming the need for better financial methods as changes are taking place in the world, and most economies can’t rely on the same classical methods of printing money every month for citizens.

Back in February, Janet Yellen made several mixed statements about crypto, specifically, Bitcoin, calling it a “special concern” by outlining how crypto-assets are being used for “shady businesses”. Yellen added that Bitcoin and other cryptos can be used for financing terrorism, but a report by Chainalysis highlighted how Bitcoin only accounts for 0.34% of terrorism-related transactions, keeping the US dollar as the preferred currency chosen by terrorists.

In the last 24 hours, Bitcoin has recovered 0.50% in price, trading in volumes of $49k, with a decent bullish index showing demand is still strong.

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I’m a finance journalist and copywriter with a keen interest in the fintech field. I have keen on blockchain technology and cryptocurrency and I believe it can reshape the way we see money and financial freedom.



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DeFi

Ethereum’s London Hard Fork with EIP 1559 Fee Market to Go Live This July

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The EIP 1559 is a welcome move for Ethereum users that standardize the transaction fee across the network and reduces volatility. However, mining pools have placed a strong opposition to it.

As per the latest development, July 2021 is the scheduled period when the Ethereum Improvement Protocol (EIP) 1559 will go live. As per Ethereum’s core developers’ call on Friday, March 5th, five other EIPs along with EIP 1559 are likely to join the London hard fork.

The Ethereum fraternity has been eagerly awaiting the launch of EIP 1559 amind issues of the transaction fee. The ongoing EIP 1559 helps to lower the volatility of transaction fees on the Ethereum blockchain. Besides, it also fixes several ongoing issues with Ethereum’s user experience.

Traditionally, a user sends the gas fee to the miner to include the transaction in the block. However, with the EIP 1559 implementation, the gas fee shall go to the network itself in the form of “burn”. The “burn” is also dubbed as basefee with only an optional tip paid to the miners.

The Ethereum algorithm sets the “burn” fee thereby making it easier for users to pay a fair price. Thus, EIP 1559 replaces the supply/demand auction-style system with a standard rate implementation across the entire network. Ethereum creators are confident that the proposal will be “positive ono the long term price” of Ethereum. They say that a lower and predictable gas fee ensures that Ethereum isn’t only for the rich.

This new proposal has received solid support from users and the creators of Ethereum. However, it has garnered strong opposition from the miners and the mining pools who have been on the receiving end.

ETH Miners Place a Solid Opposition

Ethereum miners have enjoyed solid revenues recently on the backdrop of the high DeFi activity on the Ethereum blockchain. In February last month, the total mining revenue clocked a massive $1.3 billion with the average transaction fee striking an all-time high of over $37. As per data by CoinMetrics, 50% of the revenue came from fees alone.

The surge in transaction fees and the ETH price has shot up the network has power to more than 100% in a year’s time. Flexpool, a minority mining pool, has launched a marketing campaign against the EIP. It has also received support from majority pools like sparkPool and Ethermine.

Nearly 60% of the Ethereum hash power is currently against the implementation of the new proposal. Interestingly, F2Pool is the only largest pool in favor of the EIP with 10% hash power.

However, mining pools have few options to stop the EIP 1559 implementation. The bigger danger that currently hovers around is the 51% attack on the Ethereum network. However, the chances of this remain unlikely at this moment considering different financial incentives for not attacking the network.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.



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DeFi

Galaxy Digital Leverages Blockstream Facilities for Bitcoin Mining Operations

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Despite the partnership announcement, Galaxy Digital Mining did not provide specific details on the number of machines deployed for the first installation.

Diversified financial services and investment management company in the digital asset sector Galaxy Digital (TSX: GLXY) said it is now hosting its newly-launched Bitcoin mining operations at Blockstream facilities. The diversified financial services firm noted that its Bitcoin-mining operations would use Blockstream facilities to initially deploy machines in Canada and the US.

CoinDesk said in a report that the partnership between Galaxy Digital and Bitcoin technology company Blockstream occurred less than two months after Galaxy Digital officially launched its mining operations.

In January, Galaxy Digital announced the launch of its miner financial services. At the time, the firm also added that it would begin its own Bitcoin mining business. Notably, providing financial services to Bitcoin miners has been a work-in-progress for Galaxy Digital since October 2020.

In addition, Galaxy Digital selected the former director of Mining at Fidelity, Amanda Fabiano, to head the new mining operations. Along with Fabiano, Galaxy Digital stated that there is a team of vast professionals working to advance the new unit. According to the press release, the new unit will be called Galaxy Digital Mining. The press release examined the functions of the new mining unit:

“…a new business unit committed to providing bitcoin miners with a comprehensive suite of financial services and products. Galaxy Digital Mining will serve as a one-stop financial services platform for miners-drawing the firm’s expertise in trading and risk management, investing and lending, and corporate advisory under one umbrella, tailored to the needs of the mining sector.”

Galaxy Digital Now Hosting Mining Operations Facilities

Now, Fabiano said that the company hopes to continually expand its mining operations. Despite the partnership announcement, Galaxy Digital Mining did not provide specific details on the number of machines deployed for the first installation. According to Fabiano, the financial services firm selected to use Blockchain’s facilities for “operational excellence.”

Blockstream CEO Adam Back also commented on the new partnership with Galaxy Digital. He said that Galaxy Digital has the opportunity to further growth with the Bitcoin technology company.

Earlier this year, Blockstream announced that it had purchased $25 million worth of Bitcoin mining machines from a Chinese manufacturer of crypto mining equipment MicroBT. Blockstream hopes to expand its mining operations with its new acquisition.

Data by MarketWatch revealed that Galaxy Digital stock had grown nearly 60% since the year began. The company’s stock has also spiked 189.68% in the last three months and almost 30% over the past month. With a market capitalization of $1.69 billion, Galaxy Digital stock has jumped 4.56% in the last five days. At press time, GLXY is closed at $17.41, a 5.74% loss over its previous close of $18.47.

Galaxy Digital has also partnered with CI Global Asset Management to launch a Bitcoin Fund in Canada. 

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Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.



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