We’re focused on enlightening as many crypto users as possible about the capabilities that decentralized, peer-to-peer, discretionary insurance unlocks, which means holding as many AMAs as possible. Below is a recap of our AMA held in the Gains Chat telegram. There were a lot of interesting questions asked and even a quiz to show the followers understanding of our product offerings. All in all, it was a great AMA and we are happy Gains Chat welcomed us into their community. Continue below to read the entire AMA transcript.
Mike Miglio: The reason I got into crypto was primarily because I educated myself on how our financial system works and the problems related to having an opaque governmental system printing money and devaluing the dollar; soon after I understood the value proposition of a Bitcoin in 2016, I purchased one.
Just after that I started a crypto law firm (4 years ago now), servicing only crypto projects and companies that needed help navigating U.S. crypto regulations. As a firm we ended up doing very well, servicing clients like QTUM, Akropolis, Gate.io, NOIA and many others. Since starting on Bridge, I’ve stopped working on the firm, and am now the temporary CEO of Bridge Mutual until Bridge Mutual transitions into a Decentralized Autonomous Organization (DAO), which is an entity that is controlled by its users.
Ian Arden: I’ve been in crypto for serious since 2017… we played with digital assets back in 2011, with Bitcoin mining in 2013, and first touched ethereum in DEC 2015 when it was back in beta. I’ve been CEO of web and mobile shop and a product manager to the transportation and logistics Start-up. That’s how I got into Blockchain for serious.
I’m excited about the bullet proof quality of blockchain data and the magic that smart contracts can do. Since 2017 I’ve ran Applicature, helped Hartej build up a security auditing company called Zokyo, and have consulted dozens of Blockchain projects.
That’s a strong background, having worked with these successful crypto companies in the past. How did you get into building Bridge Mutual? While at it, can you please tell us what Bridge Mutual is about in a few simple sentences?
Mike Miglio: I spent most of the past 4 years traveling, meeting clients, speaking at crypto conferences, etc. I was able to develop a very strong network of friends that ranged from investors to developers and project founders. I had been thinking about starting a project for a while, but it wasn’t until I saw the opportunity in the insurance market and a lack in the space that my co-founders and I got together to start building Bridge Mutual.
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. More products will come later 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. This is an industry first for insurance.
We’ve been working on Bridge for about 5 or 6 months, depending on if you count the “idea phase” of our planning.
In our core team we have 2 international crypto attorneys, a director at a famous U.S. crypto exchange, an accomplished marketing guru with insane connections, an experienced marketing coordinator, a content writer that also works for a crypto news site, 5 experienced and talented devs (including our CTO, Ian), 4 quantitative analysts/mathematicians, a product manager, 2 insurance experts, and 2 graphics and web designers.
We also have a slew of advisors and 3rd party service providers backing us for the long-term, such as Tyler Ward (co-founder of BarnBridge), and Michal Terpin (long-time OG that runs a PR company that does work for a big chunk of the top100 projects.) Our advisors are people at the top of the crypto food chain.
Interesting. I see stablecoins in there as one of the products covered under the insurance you provide. Why the focus on stablecoins?
Mike Miglio: There is somewhere around $30B of value locked in stablecoins. Most of the other insurance competitors are only focused on providing coverage for smart contracts, it’s already becoming a saturated field. But in fact, smart contracts only contain about $20B worth of value, it’s significantly less than Stablecoins.
Stablecoins are desperately in need of insurance, they could crash and burn at any moment without warning. For this reason, traditional institutions are shying away from mingling in DeFi and stablecoins. They cannot trust companies like the Tether Foundation and Coinbase to keep a true 1:1 backing of their collateral. They also cannot trust that stablecoins like DAI will not be exploited (again) or hacked.
There is a lot of FUD right now that USDT could be in significant trouble and potentially crash and burn. These concerns are valid and warranted.
What milestones have you achieved these last 5–6 months. What’s ready right now and what is still in development? Is the Bridge Mutual platform ready to be used?
Mike Miglio: We are significantly far into development. Our UI has been showcased around; the token model and design is solid; our investors are all settled in; and we’ve got an established work flow.
Right now we are wrapping up development in preparation for our v1.0 mainnet launch. Top-tier auditing firms are all backlogged for many weeks, we’ve scheduled the earliest possible audit time but it’s very difficult in general to get an auditing spot. The speed that the audits get done at will determine our exact launch date of the platform itself.
Our TGE is on January 30th (very soon), which is the same day that we are having our Polkastarter IDO and Uniswap listing. A few weeks after this, we will have our liquidity mining event, which is going to be very unique and offer some very rare and coveted utility NFTs. Shortly after the liquidity mining event closes, the project will launch (assuming all audits are in place.)
While we are talking about your TGE on Polkastarter, we’d like to know. Did you raise funds so far? And are you planning to do any future raises?
Mike Miglio: We had 3 rounds of private sale and we’re finishing off with an IDO on Polkastarter just before we list on January 30th. Our private sale received over $9m in interest within 48 hours, and probably somewhere north of $20m in interest since the beginning of December (we stopped documenting investment requests after our raise filled, but we get many investment requests every day.)
Angels [$50,000 raise] — $0.0625–0% TGE
Seed [$210,000 raise] — $0.09375–25% TGE
Private [$1,350,000 raise] — $0.125–25% TGE
Polkastarter — confirmed, details to be announced
Impressive. And what will be the token use case?
Mike Miglio: The token can be staked on our platform which provides yields to the users and also gives them the ability to partake in the various features on our platform, such as voting, which allows users additional ways of earning profit sharing and yields. The token is also used to govern the system’s DAO, and our system incorporates a token buy-back feature to help support the price.
Unlike some other insurance platforms, our token is not used to purchase insurance policies, to provide coverage funds, or to pay out successful claims. When a system uses their token (which is volatile) to pay out a claim (wherein losses are usually measured in fiat values), then there is always a chance that the system runs out of money because a large claim could be made when the price of the token is low. In addition to that, the claimant has to sell the token to recoup their losses, and this creates problems with slippage. In order to solve this problem, these platforms have to use a “bonding curve” to directly control the price of their token at all times. To control the price they use a minting and burning function which is generally a bad thing, and the bonding curve model creates high volatility for its users limits the flexibility of their token. For all these reasons, our system uses stablecoins instead of BMI to purchase policies and pay claims.
That’s very smart. Reduced selling pressure on your token makes investors happy
Q: Cover has experienced smart contracts exploits even if they claimed to be a smart contract protector. So how can I trust Bridge. Funds are held in smart contracts. What if its hacked?
Mike Miglio: Everything in the DeFi system is vulnerable to hacks. The reason I picked this question is to showcase that two of the world’s top auditors will be auditing our smart contracts: Zokyo and Consensys. We are doing everything we can to create a stable and secure system that is resistant to exploits and void of significant attack vectors. However, in the event that something does happen and we do get hacked, our system was designed to always designate a small % of our revenue into a special pool that can be used to refund our economy.
The system itself has many pools (hundreds and eventually thousands), meaning the value of our economy will be segregated into many potential targets, making it logistically difficult to void our system of all its value. If any of these pools get hacked, we should be able to completely recover it.
Q: With Bridge there is no need for the KYC process. My question is, how do you replace this important step to ensure transparency and security of operations and functions within the platform? Does no member of the Bridge team have access to the funds posted in the system?
Mike Miglio: So the reason that other competitors use KYC is because their business model requires them to personally manage funds and make investment decisions with other people’s money in order to create yields. This kind of activity is regulated, so they have to legally register as a fund which in turn requires them to collect KYC on their users.
Bridge Mutual’s platform does reinvest user’s funds, but it does it automatically using an algorithm similar to YFI. The team never has access to user’s funds and does not personally decide where the money goes.
Having KYC or not having KYC does not increase or decrease the overall security of the platform, it just changes the way the voting system has to work. Not having to collect KYC on users is a huge advantage that Bridge has over some other competitors — nobody in the DeFi space wants to upload their passport to use a service.
Q: I read on website that, “All claims go through a 3-phase voting process that is enforced with rewards and punishments”. What are these phases? And please explain.
Mike Miglio: So actually, our voting process isn’t exactly 3 phases anymore, but is multiple phases. To explain the entire voting process takes a while, and we’re also trying not to share much information on it so that competitors cannot copy us before our launch.
The reason our voting process is complex is because the team will have no control over it. Other projects use a centralized layer that they call a “council” or “advisory board”. These centralized layers typically have the power to cancel people’s votes, burn their stakes, reverse the voting outcome, and appeal past decisions. That is a lot of power to give a centralized layer, and arguably it makes these projects NOT decentralized at all. They claim it is decentralized because the users get to vote in the members of these boards, but typically the people with the most tokens and control over the voting will be the founders and VCs with large investments into their private sales, so these are the people choosing who sits on the advisory boards and councils.
Our project has no such advisory board, so we had to design a very thorough system to make sure that a vast majority of the claims will be assessed and adjudicated in a fair manner. To do this, we align users incentives with a reputation system, rewards, punishments, and a share in the profit made from the premium that the claimant paid.
Keeping your cards, close to your chest, I see
Ayeley, [11.01.21 21:48]
Thanks for the answers. We’re going to start with the quiz in a moment
FIRST QUESTION: What day is our Polkastarter IDO and Uniswap listing on?
ANSWER: January 30th 2021 on Polkastarter
SECOND QUESTION: Who has the power to add new smart contract insurance products to the platform?
THIRD QUESTION: What are the 4 types of products our platform will have at launch?
ANSWER: Smart Contracts, Stablecoins, Wallets, Centralized Exchanges
FOURTH QUESTION: Does Bridge have a centralized body that can control the outcome of claims, burn people’s money, and generally destroy the spirit of Decentralization?
ANSWER: There is no centralized layer in Bridge that has the power to change voting outcomes.
Q: In Bridge, the response time for claims and voting is predictable? The response time and resolution of claims is how much? Does it vary according to the type of complaint or not, regardless of the size of the complaint?
Mike Miglio: Yes, the response time is always predictable.
Right now there are 3 day voting periods and 10 days between each vote; we may change the voting time for various projects (CEX insurance may take 3 months, smart contract insurance may take 1.5 months, etc.). We will eventually integrate a push notification service to alert users when it is time for them to vote on claims, and this will also be a feature in our phone app which will come much later.
Q: Nexus Mutual, with a market capitalization of around $200M, is currently the most significant competitor for Bridge. Could you briefly mention your main competitive advantages?
Mike Miglio: Awesome question.
1. We provide coverage for stablecoins and centralized exchanges, not just smart contracts.
2. We have no minting and no equations or bonding curves that manipulate our token price. Because we don’t use a price equation, our system is much more complex, the price equations are a really easy to way to keep things balanced but they come with a lot of negative side effects and limit what you can do as a platform.
3. We have innovative new use-cases for NFTs on our platform that have never been done before.
4. We have no centralized layers that can influence or completely control the outcomes of claims. Check other models, you will see “advisory boards” that are supposedly decentralized because the community can vote who sits on the board, but in reality the ones choosing who sit on the board are the people with all the tokens (the founders and VCs).
5. We are partnering with top-tier auditing firms and paying for 3rd party projects (Aave, Compound, etc.) to be audited.
6. We have an extremely intricate reputation system.
7. We don’t collect or require KYC, our system is anonymous;
8. We are building on Polkadot instead of Ethereum to avoid high gas fees;
9. Nexus has to manually approve and add assets to their system, our system is permission-less in such a way that allows anyone to add an asset to our platform and start insuring it immediately.
10. We do not have control or access over user’s funds, and user’s coverage funds are invested automatically as per our algorithm to provide additional yields to our users.
This is the honey right here, it’s essentially all the major reasons we’re the next evolution of decentralized insurance.
Q: Crypto people say that the next boom will on NFT after the Defi, Do you agree with this? And what are the plans of #BRIDGEMUTUAL to build on NFT concept/Technology? Any future idea about NFT?
Mike Miglio: We have NFTs in our system, yes. There are 2 types of NFTs that will be used, and they’re not just pretty art that you can trade around. The NFTs on Bridge have unique utility.
Our liquidity mining event is happening sometime probably in February, and there are going to be very unique, coveted and powerful NFTs given out to liquidity providers that actually have an impact on our system.
The second type of NFT is a core part of our business model and solves one of the largest problems that exist with every other insurance protocol. I can’t go into details on it yet, but we’ll explain how it works as we come closer to the launch. It will be one of the primary reasons people use us over other competitors.
Q: Many projects rug pulled and exit scam recently. Why should investors trust your project not to do the same?
Mike Miglio: We’re all credible professionals you can easily find on Linkedin, and we’re building something that could potentially change the face of DeFi. No reason to rugpull or steal funds when the long-term potential of the project is in the trillions of dollars.
Also, we’re getting audited by very reputable companies.
Q: How is this project structured, is it decentralized or an open source protocol to which everyone can contribute? If so, how is the management plan for the work .. ??
Mike Miglio: We are going to transition into a DAO over time. In order for DAOs to work as intended, you need a significant amount of users and decentralization. Until this time comes, the team will have to make critical decisions and improvements on the system, but the team can’t/won’t interfere with individual claims and votes.
Once the system is in a stable state and doesn’t need much improvement, the DAO will take over and the community will be in charge of making sure Bridge Mutual lasts.
Q: Can users use Bridge Mutual to insure their own funds on CEX? Do you plan to cooperate with famous CEX in the insurance industry?
Mike Miglio: Users can insure their own funds on any CEX that is listed on the platform. We will have a CEX listing on a famous CEX.
Q: The big problem in DeFi is rug pullers and scams. Many people are losing your money with these projects. How about it, what is the security to trust in DeFI in $BridgeFinance? Do you have liquidity locked?
Mike Miglio: We are not $BridgeFinance. Please do not forget.
We are Bridge Mutual, $BMI
It was a pleasure having you join our community today! It was great learning about Bridge Mutual. All the best with the IDO later this month. It’s refreshing to know how well thought out the product is. Very soon no-coiners will be confident getting into crypto knowing that they will be covered by Bridge Mutual.
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