Terms and Conditions

Premium Calculation:

Insurees pay a premium based on the current utilization of the pool, similar to variable rates in lending protocols. The premium is calculated dynamically and is lower when the utilization is low, while it’s higher when utilization is high.

Collateralization:

Backers provide collateral to back specific assets. The entire premium paid by insurees is automatically staked as new collateral.

Option Tokens:

Insurees receive option tokens in their wallet. Option tokens are liquid and transferable.

Backing Tokens:

Backers receive backing tokens in their wallet. Backing tokens are transferable, allowing Backers to sell their position while retaining a portion of earned premiums.

Exercise of Options:

Insurees can exercise their options at any time before the expiration date. To exercise, insurees burn the option token, send the specified asset amount to the protocol, and receive back collateral at the predetermined strike price. The only condition for executing options is the expiration date.

Premium Distribution:

The entire premium paid by insurees is split between Backers as a reward. Backers also earn premiums during their backing duration, and assets obtained when options are executed. Premium can be claimed only when the Backing period ends.

Price Oracle:

The price of the collateral asset is obtained from an external oracle (Chainlink).

Solvency and Commission:

Full solvency is ensured, and insurees can always execute their options at the strike price. No commissions are charged for the protocol, and there are no additional conditions beyond the expiration date of options and backing tokens.