Attacks on major cryptocurrency exchanges are regrettably common. Over $200 million dollars have been lost to hacks and exploits on services such as KuCoin and, more recently, Origin Protocol. Although these events are an inescapable risk, there are new services that offer protection against loss of funds for these scenarios.
Bridge Mutual is a decentralized insurance provider that works as a peer-to-peer discretionary coverage platform for digital assets. It allows users to cover other users on smart contracts, exchange hacks, and other risks that are inherent to the cryptocurrency market. The platform is built on the Polkadot blockchain and has just announced the initial offering of its BMI token on Polkastarter. These will be available starting January 30, 2021.
BMI tokens can be earned by providing coverage to other users. Once Bridge Mutual users deposit stablecoins in an insurance pool for a certain asset, they earn passive yields in the form of stablecoins or BMI. Funds locked by Bridge Mutual users in coverage pools are reinvested into yield generating platforms that bring returns to coverage providers.They also earn profit as more users buy this coverage.
On the other hand, users can easily file a claim and recuperate their funds in the event of an attack. Stablecoins from the coverage pool go to the claimant once a claim has been approved by the stakeholders. To determine the validity of a claim, Bridge Mutual employs a voting process that has a short and predictable timeline.
In the case of decentralized insurance provided for stablecoins, the process is a bit different. Bridge Mutual keeps track of stablecoin prices across major cryptocurrency exchanges to catch any drops below a certain level and time period. Covered claimants can then submit a claim if they had purchased coverage before the drop. This entitles them to the full value of the policy they purchased, which is delivered instantaneously.
The team behind Bridge Mutual is led by CEO Mike Miglio and is made up by seasoned professionals in insurance, computer science, law, and finance. Miglio explains his vision for the platform, stating that “using Bridge, people can control the risk exposure of their digital asset investments, just as they do with real-world assets.”
To learn more about Bridge Mutual please visit: https://www.bridgemutual.io/