The utility value of InSure and other DeFi insurance services in the Web 3.0 space.

Figure 1 InSurance plans cover all the crypto and DeFi projects (Image adapted from: 101blockchains)

The value and utility in the future world of Web 3.0

We are currently heading into the next generation of “spatial-infused” technology, what is coined nowadays as ‘Web 3.0’.

Web 3.0 is the decentralised, blockchain-backed internet of things of tomorrow, where the borders between the physical world around us and invisible digital data will start to dissolve.

As the digital and physical worlds merge, new value will be created from within this nexus.

In providing this new value to the people, in the hope of true decentralisation, there will no longer be the need for “middle men” or centralised third-party bodies taking a commission for their service.

Crypto currency and decentralised finance (DeFi) are only the first signs of a system of value created for the good of the world of Web 3.0.

‘Utility tokens’ are where the real value is at

So what are utility tokens and how do they differ from standard tokens? Well, utility. Plain and simple. Utility tokens offer functionality “beyond being just a digital asset…providing functions beyond market value… enabling a fully decentralized ecosystem”, according to the Swiss cryptocurrency exchange, Shapeshift.

One of the major challenges currently facing the DeFi scene is the lack of knowledge in token valuation — how do you know what token is actually worth it’s weight in value? How do token holders know what they are getting?

Well, crypto researchers and DeFi specialists are now starting to devise models and formulae for how to predict and assign value to utility tokens and pinpoint what variables are necessary to consider in determining this value.

Pazos 2018 constructed a valuation framework to determine the value offered by utility tokens via the “Quantum Theory of Money”. The study hopes to “help network developers to understand how key variables impact the valuation of the network they are trying to build”. Put simply, models such as this will help enable us to properly identify and distinguish truly valuable utility tokens from the rest.

Figure 2 TAM, SAM and SOM are the ‘addressable market sections’’ within the Blockchain community, necessary to define when valuing utility tokens (Image sourced from: Pazos 2018)

So what value can utility tokens, such as SURE, bring to the world of Web 3.0?

Well, via decentralized insurance protocols integrated and embedded within the Ethereum (ETH) Network, we can:

1. Facilitate tracking of the insurance plans purchased by token holders as well as insurance payouts
2. Distribute fraud risk across nodes for investments made in the ETH network
3. Distribution of the Risk Funds pool in “staking mode”: any excessive residual funds will be reinvested and profits will be distributed based on the size of stakes (yearly based on the date of the last deposit of SURE to the wallet — traceable on ETH Network)
4. Allow SURE tokens to be resold on other platforms when centralized exchange (CEX) cryptocurrencies (of fiat currencies) want to offer the fund’s insurance services
5. Offer a hybrid approach towards the insurance claim payment voting system, utilising our AI expertise. In simpler terms: staked nodes can vote on the validity of the insurance payment claim and get rewarded. A node or member system for insurance claim payments.

So keep an eye on this space. DeFi insurance = Insurance without the middle-man.

Utility value beyond just a crypto token.

Check us out here:

Official website: https://insuretoken.net

References

Pazos, J. (2018). Valuation of Utility Tokens based on the Quantity Theory of Money. The Journal of the British Blockchain Association, 1(2), 1–7. https://doi.org/10.31585/jbba-1-2-(2)2018