Yesterday we held a great AMA where the fans of one of the best Telegram groups were able to ask us anything they wanted to about Bridge Mutual, the launch of our insurance platform, and our goals moving forward. It was great to be able to chat with such an informed community! Below is the transcript of the entire AMA and all the questions that were asked and answered.
Ian Arden: Hey all I am a CTO to BridgeMutual. I’ve been doing blockchain development and management since early 2017, my teams have audited a good dozen of DeFi projects, and we are now building BMI
Mike Miglio: Right now I’m the CEO of Bridge full-time, but I’m also a crypto-securities attorney in the U.S.; I started my own crypto law firm back in 2017 and bought my first bitcoin in 2016.
From 2017 to the present, my firm did work for QTUM, Akropolis, Gate.io, NOIA, and dozens of other crypto clients and projects, so I’ve vicariously been through the motions of launching many projects and learning from their mistakes. I’ve also spoken at many conferences throughout the years as an industry leader on crypto legal issues. All of these experiences gave me many opportunities to meet influential and talented people in the space, which has been instrumental in the starting of Bridge.
Really excited about what we’re doing honestly, I’ve never seen anything like it and I think we’re miles ahead of the competition right now.
What is Bridge Mutual and why is it worth taking a look?
So Bridge Mutual is a decentralized, DAO-controlled, p2p / p2b discretionary insurance platform that allows people to insure stablecoins, centralized exchanges, smart contracts, and other centralized crypto services (like custodians).
In short, the platform lets you and others provide or purchase insurance for hacks, rug pulls, exploits, and other events that result in permanent loss of funds. For stablecoins specifically, the platform protects against price crashes for any reason.
I also lost some funds in cryptopia and more recently in another DeFi project, so I’ll be using it, too.
We believe that the DeFi culture has to change. In the near future, insurance platforms should be paying for independent audits of popular projects new and old. I think that is where the space is heading. It’s a conflict of interest for teams to have their own code audited, rug teams can simply get the wrong code audited or just alter the code after the audit or after going live.
That’s why we’re partnering with auditing firms (2 large ones already, one is Zokyo, the other is not announced yet).
Eventually Bridge will pay for the audits through its ecosystem, the DAO will contract them for long-term engagements and the firms will give us a discount for bulk work.
Can you share the story behind the brand — Bridge Mutual?
We believe that the biggest roadblock between institutional investment and DeFi is that the crypto market (especially DeFi) is too risky and unpredictable. I’m not just talking about high volatility, I also mean the constant threat that 1) all of your funds can be stolen from out of a smart contract; 2) if you want to keep your money in a non-volatile asset like USDT or DAI, the price of stablecoins can crash due to a hack, new regulations/news, or actions from opaque organizations like the Tether foundation; 3.) Exchanges can be hacked (KuCoin) or run off with your money (Mt. Gox, Fcoin, etc.); 4.) projects can rug pull, and so on. Most of this space is not ready for institutions.
The “bridge” between institutional capital and DeFi is insurance. With enough reputable and reliable insurance platforms in the space, we can (will) create a safety net that provides enough security and certainty in DeFi to encourage large investments.
Kucoin was a big one. It almost killed the exchange. And KuCoin had a huge debacle with their insurance company supposedly.
Insurance companies are way too incentivized to fight against their clients.
Other insurance projects mainly cover smart contracts. What is Bridge’s approach?
Smart contracts are the tip of the iceberg for insurance on-chain. Nobody is paying attention to Stablecoins, which has a much higher TVL than all of the smart contracts in the DeFi space combined. And stablecoins are growing exponentially, which is potentially a ticking time bomb. USDT and USDC are very centralized and non-transparent (USDT hasn’t been audited independently since 2017). Right now, everyone is using USDT under the assumption that a dollar is banked for every USDT minted, but there are many reasons to believe this is not the case. If strong evidence ever comes out that USDT is not backed 1:1, or if regulators finally declare USDT a security, we could see the price crash significantly in a matter of hours.
A decentralized stablecoin like DAI is a better alternative to centralized stablecoins, but all decentralized assets are prone to hacks and exploits (DAI’s Black Thursday event) which result in massive price drops.
Likewise, there is no meaningful regulatory body that can control all exchanges, no standard for them to be insured, and no insight on what security measures most of them take to secure funds.
Over time, these conditions will improve. But providing insurance products to cover the downside of these flaws is something we can do immediately to make the space safer for all and promote innovation.
We also have many other things in the works. A phone app and some non-crypto products will be introduced probably in the second half of 2021. (We already have some of the modeling done for non-crypto products).
What else makes Bridge Mutual unique?
- Stablecoin and centralized exchange insurance is an industry-first and is needed now more than ever: https://bit.ly/3hKyPH0
-No minting, no burning, and no static equations that manipulate our price — a steady supply of 160,000,000 tokens. Most other projects use a price equation that manipulates their price, so the token will see massive price drops in the event a claim is paid out and experience heavy volatility in general. This is bad.
-We’ll be migrating to Polkadot for low gas fees. All insurance projects utilize many transactions to assess and adjudicate insurance claims, so this is very important. Users don’t have to know anything about Polkadot or own $DOT to use our platform, the app is very intuitive, and cross-chain assets are covered by Bridge Mutual as well.
-Cross-chain insurance for assets and platforms on any network. A totally permission-less network that lets anyone add brand new assets by their contract ID within minutes (kind of like Uniswap); no more centralized gate-keeping.
-Two new use-cases for NFTs on our platform that we’ve never seen done before by other projects (more on this in a later announcement).
World-class team, advisors, and partner projects from multiple industries (more being announced through January).
-More advanced than binary yes/no results on insurance claims, our platform’s voting system allows the community to determine the exact amount that a claimant should be rewarded.
-No centralized “Advisory Board” or “Council” layer that can overturn votes and change outcomes, as this is not truly decentralized. Many other projects have a centralized layer that can control votes.
A very intricate reputation system that makes it lucrative to be an honest and active voter on the platform.
-Partnering with multiple top-tier auditing firms as an integral part of the platform’s business model — in the near future, Bridge will pay to audit other projects to combat rug pulls and increase the credibility of the space as a whole. In the near future, the industry will use our ratings as a measuring tool to determine what investments are safe and what they should buy insurance for.
I can’t wait to reveal more. But people will steal our ideas and copy us if we announce them.
They’re more than just art. A lot more.
Our team is really solid. Ian is the best CTO you could ask for. No matter how complex the vision becomes, Ian’s always like “no problem, we can code that”. Extremely lucky to have him in our back pocket. It’s extremely important to have a good CTO with vision. We expect to be part of the Parity program and grant as well, they’re just waiting on us to give them proof of code.
Did I mention we had $9m in allocation requests within 48 hours? We stopped counting after that, but a lot of funds are trying to buy their way in now as well.
Last question before we let the Spectre members run wild — How does the platform function?
That’s a big question, and also due to the hyper-competitive nature of the insurance space right now, we can’t release a lot of information until we’re closer to releasing our liquidity mining event, which should happen in the second half of February. Around this time, we will also release our white paper and it will go into detail on everything, but here’s the gist:
Users can choose to provide insurance coverage for any project they want and earn yields in return. When someone else purchases insurance from an asset that you’re covering, you receive rewards from the premium they pay. The money you provide to the coverage pool is reinvested into multiple other highly-vetted yield generating protocols, such as Aave, Curve, Balancer, Compound, and more. Our algorithm rebalances the funds every cycle to achieve optimal yields for our users, and these yields are given back to the coverage providers as an additional incentive to provide coverage.
Other projects can also easily integrate shield mining with Bridge Mutual so that users are rewarded in their native token in exchange for providing coverage to their project. And, of course, projects can purchase their own insurance as a show of confidence in their code, and as a way to recoup their economy post-hack.
There are also many incentives in place for users on our platform to partake in claims assessment and voting. All claims (except stablecoin claims) are processed via a 4 phase consensus model. Stablecoins, however, are processed instantly and automatically. Sorry man I told you my answers would be long lol.
There are many more components to the system, but these are the details we’re comfortable with sharing right now. All of our public-facing material is out-dated and does not go into detail about how our model really works, this is to protect us from idea theft.
I’m telling you it’s 2 steps ahead of the closest competitor. We’re trying to set the standard.
Looking to hear more about the 4 phase consensus model. Quite intriguing to see this in action.
That being said, the space needs multiple insurance protocols. We can’t and won’t be the only ones.
Our platform will cover all the other insurance platforms as well. So you can buy Nexus/Cover insurance. There is also a backup pool that will be used to insure Bridge itself. Also, we’re doing a Polkastarter IDO, I guess that was announced but not mentioned here.
Now to the best part of the AMA — the community questions!
Q: Where will the money come from for insurance of smart contracts / stablecoins / CEX? From what funds will the money be paid if Binance will exit scam, for example?
Mike Miglio: This is a good and basic question that a lot of people don’t understand at first. Our platform has 2 types of users, primarily. Coverage Providers and Policy Holders. Coverage providers use their own capital as collateral to insure projects of their choice. In exchange for this, they get rewards from multiple angles which results in a competitive APY. Policy Holders use their capital to purchase an insurance policy for a specific asset at a set amount and a set length. So if Binance got hacked, the money would come from the people providing coverage to the Binance pool.
Q: I’m a developer, and I’m interested in contributing to Bridge Mutual alongside earning, Do you have any Bug Bounty to check for vulnerabilities?
Mike Miglio: Yes. Great question. We have a generous pool of bug bounty tokens. Security in our platform is a top priority for us, genuinely. Our auditing partners are top-tier, and we’ll be very active with our bug bounty community. I hope you, specifically, will join us in our efforts to keep the platform safe and stable.
Q: What innovations has $BMI brought to the DEFI space? How is $BMI changing the new DeFi ecosystem and what are the plans for the next few years?
Mike Miglio: I think what we’re doing with NFTs in our system is something that is going to be widely copied by other projects, not just insurance platforms. Also, our token model is completely unlike any other insurance protocol. Most insurance protocols are sharing the core components of their model in that they use bounding curves and have a thick centralized layer making key decisions (Such as the cost of insurance, or whether to veto an insurance claim that was already approved). We’re the most decentralized by far with no centralized layer affecting the cost of insurance, the outcomes in the voting system, or the projects that get listed on our platform.
Over the next few years, we’re going to focus on real-world adoption. We’re starting in DeFi, but we’re already coming up with models that could work for non-crypto use insurance products… Expect a phone app and some major announcements with some traditional companies over the next couple of years. We’re already talking to a chief executive at one of China’s top 3 insurance companies, and have been talking with another publicly-traded company about how to integrate our services to their userbase as well…
That last question I answered has some info that has never been told to anyone else outside the team.
Q: What are some of the major achievements that the Bridge Mutual project has achieved and what milestones are planned in the upcoming months/years?
Ian Arden: I’d like to cover our progress on the tech side… our tech team consists of 3 front end developers (we use Angular latest version), a UX designer (Figma), 4 solidity developers.
We are almost done with the visual layer of the system and with the key skeleton of the smart contracts. After we have stress-tested our token economics we will finalize the exact formulas for premium, reinsurance, and other calculations.
We use agile and scrum for our developments to ensure the sub-teams are always focused on delivering working features of the product.
We plan to launch the first early version in Q1 2021.
Q: Are you a global project or local project? At present, which market are you focus on, or is it focused on building and growing to gain customers, users and partners? Can anybody anywhere use this project without any restrictions?
Mike Miglio: Our team is fully decentralized, we’ve got people in multiple countries around the world. We’re focused on the DeFi community right now but will pivot our marketing efforts to the more main-stream crypto community soon after we launch. Our interface and app are extremely intuitive, @ian_arden is making sure that even a novice can understand what he’s doing on the app. Whereas something like Curve can only be used by people with strong knowledge in the space, our app literally walks you through your first insurance purchase with a guided tutorial.
Anyone can use the platform. There is no KYC, no blacklisted countries, etc. Remember that our goal is to evolve into a DAO and relinquish control of Bridge. Bridge will belong to its users, we are just the team creating it at first.
Q: Too many projects promise magic but never release any working product or prove any revenue, Within a short/long time of release. Is your project also like this? If not can you tell us, What interesting topic makes your project different from other projects?
Ian Arden: I hear your pain. Too many promises is what we all have seen back in ICO hype.
I think we have all the components for potential success: we are well funded, I have enough bright brains on the tech team, we follow lean startup and lean development. So long as we have enough time to build and test things out properly we are good 👌
Q: Are you planning to promote your project in countries / regions where English is not good? Do you have a local community for them to better understand your project?
Mike Miglio: We will be translating our platform and website into multiple languages soon after launch. We already have a half-baked Chinese translation for now. We’re also heavily marketing in China/Korea and Asia in general. Our team is global and we are very conscious of the need to accommodate all markets, not just English speakers.
Q: What’s the reason behind using Polkadot Blockchain? and not Ethereum or scalable Blockchains?
Ian Arden: Polkadot is still early on but we see the future in the systems more scalable than Ethereum as it currently stands.
We have a lot of respect for Ethereum and solidity (we first touched Ethereum in December 2015 when it was in beta), and we believe in solidity as the industry standard or at least the leader for smart contracts languages.
We want to remain practical. Therefore our strategy is to build on solidity and start on Ethereum however port to Polkadot and potentially some other chains where solidity and EVM are enabled.
Mike Miglio: There is one question I’m seeing a lot that I don’t want to waste a prize on. People are asking if there is any burning or minting mechanism; the answer to both is no.
There is no burning or minting function in our code and our model doesn’t rely on one. There is a segment of our model in which BMI tokens get purchased off the market, but I can’t say more than this.
Q: What is the Bridge Mutual infrastructure that gives developers the tools needed to build DApps?
Ian Arden: That’s a very profound question! The open protocol for external developers is not finalized yet but we are fantasizing about it within the dev team here.
The goal would be to sponsor and support innovation through grants and hackathons focused on insurance, security, and transparency projects.
I don’t think that realistically we will have time for it in year 1
Q: Tell us the Procedure of Claiming process of Bridge Mutual Platform? If a Platform got hacked.. then what are the requirements for claiming insurance of Bridge Mutual Platform?
Mike Miglio: Great question. I was really looking for questions that were clearly targeted to our model instead of generic ones.
If you had an insurance policy for 1inch and 1inch got hacked/exploited and you lost funds, you would just connect to the platform using the web3 wallet for the ETH address that you purchased the insurance policy on. The main dashboard displays all of your active policies, and you can just hit the “Claim” button next to your 1inch policy. From there, you can write details or submit photos/videos as evidence. All the users voting on your claim will have access to the evidence you submit, and then it will go through our 4* phase voting process.
3 of the 4 phases of our voting process are made public on our pitch deck. 1 of them is still confidential so that we avoid idea theft. Any user that is staking funds on our platform will have the ability to vote on your claim. The model on our pitch deck is roughly similar to how our voting model works, so you can see more there.
The claims process in total takes 45 days or less, depending on the phases. Also, the voting is entirely anonymous, nobody can see how other people are voting until the end of the voting round.
Stablecoin insurance is the only product that is handled differently. The system automatically and instantly approves/denies stablecoin claims based on set parameters, so the payout will be near-instant for this.
We weren’t planning on doing this, but there are a lot of people here paying attention and Spectre Group has provided us a lot of support.
We’re going to release, for the first time publicly, the presentation version of the Bridge Mutual app.
The presentation version is somewhat outdated, the current version which is coded does not look exactly like this, but it’s something cool everyone can play around with. We’ll then announce the UI for the public to see as well on our official channel.
Again, this is an older prototype of our UI. (But it’s still badass)
Please check it out, play around with it, and feel free to provide feedback. Though the newest version of our UI is already significantly improved.
There are inconsistencies with the presentation version and the final product :P
We’re not too worried about it. Things evolve, people should understand. The platform is only getting better. I actually prefer the inconsistencies because it will confuse our competitors.
As a reminder don’t buy fake tokens on uniswap. There’s a ton of clones. We have not released our token yet! Please follow our official channels. I’ve seen someone write above that they have bought BMI tokens, those are def fake ones; please don’t lose your money. Also, there are fake accounts posing as team members that try to scam people, Ian and I will never DM you randomly.