Here’s our 44th AMA recap!
Thank you to the Infinity Chain for participating in Ask Me Anything (AMA) with Soteria Mutual Finance on February 9, 2021. This guest star,
- Cass — Community Initiator
Introduction
Soteria,
Hi, I am the community initiator of Soteria, the insurance mutual platform on BSC. Soteria is a project of the community, by the community and for the community,Q1. Would you like to give us a simple introduction of Soteria?
Soteria,
Soteria is a decentralised alternative to insurance and is the first mutual (a risk sharing pool) on the Binance Smart Chain (BSC). We’ve used blockchain technology to create a platform which returns the power of insurance to the people. It not only utilizes the fast transaction speeds of BSC, but it is also highly integrated with the BSC DeFi ecosystem. It allows anyone to become a member and buy cover, and greatly diminish or reduce the financial risk of hacks. It replaces the idea of a traditional insurance company, because it is wholly owned by the members. The model encourages engagement as members receive economic incentives for participating in Risk Assessment, Claims Assessment and Governance.Soteria provides insurance for losses caused by vulnerabilities in smart contracts and hacker attacks, and risk protection for DeFi products. Soteria is a community-based insurance platform. By staking tokens, users are both gainers and risk bearers. At the same time, token holders can use the tokens they hold to determine how much insurance coverage a project can have and whether to approve claims.
Soteria has completed the IFO on Pancake at Jan. 21,4PM SGT. wSOTE sold out in a record time of 1 minute on PancakeSwap and reached 2272% of target raised. For more information, please check https://twitter.com/SoteriaFinance/status/1352450852905078785
Q2. What’s the motivation for starting this project?
Soteria,
The concept of insurance comes from communities in the past that pooled their resources to protect each other from the risks they all faced. The more people in the pool the better it works as the numbers become more reliable. But this method wasn’t scalable because it is a trust-based system and the network of individuals trusted by everyone in the pool only extended so far. Hence traditional insurance companies emerged.When BSC grew to become the second-largest DeFi ecosystem in just a few months, we realized we could apply our smart contract knowledge to our passion for decentralized technology. We believe Nexus Mutual’s mutual model is the best choice. We build a mutual where individuals only need to trust the system, not everyone in it.
Q3. What makes Soteria special?
Soteria,
Similar to traditional co-insurance companies, Soteria adopts a co-insurance model to collect funds from policyholders, and members form a community to share risks and share premium income. The funds held by the community, that is, the capital pool is used for insurance claims. On the one hand, the funds in the capital pool comes from the direct injection of the insurer’s purchase of token funds, and on the other hand, 50% of the funds purchased by the policyholder will be injected into the fund pool. When compensation occurs in a certain contract, the SOTE token pledged in the contract will be first destroyed to pay compensation. If the pledged SOTE cannot fully cover the compensation, other funds in the fund pool will be used for compensation. Therefore, although users pledge SOTE for different contracts, the insurance fund pool is ultimately shared by all contracts.Different from other insurance projects, Soteria’s economic model stimulates public participation in risk protection capital, and MCR (Minimum Capital Requirement) guarantees that when a claim occurs, it can be fully paid. The formula in the smart contract sets the SOTERIA price to be linked with the risk protection capital. The more adequate the risk protection capital, the higher the SOTE price. As capital decreases, the price of SOTE will decrease, but it still needs to meet the minimum requirement of MCR%.
According to this logic, as long as the platform can incentivize more users to pledge tokens, the value of SOTE tokens will increase, and the purchase demand will increase sharply, realizing the positive cycle of the Soteria ecosystem, promoting the development of the platform, and further protecting the DeFi ecosystem development and the benefits for its users.
Q4. Why did you choose the Binance Smart Chain?
Soteria,
The ecological integration of Soteria and the Binance Smart Chain is close. Soteria will be running on BSC and directly using BNB as funds for insurance purchases and claims settlements.
BSC’s transaction speed, security, low cost, and EVM compatibility make it a competitive DeFi public chain, attracting many high-quality projects. Binance Smart Chain has become home to nearly one hundred DeFi protocols in just a few months after its launch. The accumulated locked assets are worth hundreds of millions of dollars. Among them, dozens of mainstream digital assets have been wrapped and added to the Binance Smart Chain through the Token Canal Project and Panama Project, including ETH, XRP, LTC, BCH, LINK, DOT, etc. At present, each type of digital asset has reached thousands to tens of thousands of holders and has a wide range of applications. In addition, there are emerging projects, such as BAKE, CAKE, and BURGER, focusing on various micro-innovations in the fields of Swap and liquidity mining. These have contributed to the ecological construction of BSC and stimulated the development of ecology.
To date however, there are no insurance applications on BSC, which undoubtedly limits the composability of the product and is not conducive to the formation of DeFi Lego. In addition, in view of the recent insurance project security incident, the safety of DeFi products has become an important area of innovation in compostable products. Currently, certikshield can initially support smart contracts on the Binance Smart Chain, yet Soteria will be the only insurance platform that runs on the Binance Smart Chain and uses BNB as a guarantee and claims assets. Through in-depth integration with the Binance Smart Chain ecology, it can greatly stimulate the application scenarios of BNB and accelerate the rapid development of the Binance DeFi ecosystem.Q5. What can the members do on Soteria?
Soteria,
1. Buy smart contract cover.
2. Contribute funds to the mutual and hold SOTE tokens.
3. Stake on smart contracts to show they think that contract is secure and to earn rewards.
4. Put forward governance proposals, which will come online very soon.
5. Vote on proposals put forward by the team or other members, this will also come online very soon.
6. All members of the mutual are sharing risk with each other.
For more information, please kindly check the tutorial of Soteria https://twitter.com/SoteriaFinance/status/1350311416859824128Q6. How can we become a member of Soteria?
Soteria,
Our official website has launched: https://soteria.finance/#/, after redirecting to https://app.soteria.finance/, users can register as a member and use BNB to exchange SOTE tokens.
please kindly check the tutorial of Soteria https://twitter.com/SoteriaFinance/status/1350311416859824128Q7. What kind of cover does Soteria provide?
Soteria,
Initially we have launched with two types of products; Smart Contract Cover and Custodians. The purpose is to provide the community with protection against hacks on value-storing applications (known as smart contracts).
Down the line, we intend to move into more mainstream products. We started building the platform on the premise of providing cover against any risks, including price plummet risk.
We have offer covers for more than 8 projects now.
Q8. Why do you need a token? How is the token price determined?
Soteria,
A token is needed in order to bind together the internal economics of the mutual, so that the platform can;
☑️ dynamically react to the prevailing conditions and capitalization levels; and
☑️ reward active members for participating in the day-to-day operations of the mutual.
Soteria uses a token bonding curve (also known as a continuous token model), with the price in BNB driven by two main factors:
☑️ How much capital the mutual has.
☑️ How much capital the mutual needs to meet all claims with a certain probability.Q9. How are Risk Assessors involved?
Soteria,
Risk Assessors for the Smart Contract Cover product are likely to be those with smart contract audit expertise or capital providers relying on auditors’ judgement.
They can stake value in the form of SOTE, thus vouching for the security of the contract and dropping the price of cover. Staked SOTE can be unstaked at any time subject to a 90 day withdrawal period.
When Cover is subsequently sold on, the contract Risk Assessors earn proportional rewards in SOTE equivalent to 50% of the price of cover.
If there is an accepted claim on this contract, the Risk Assessors’ stake up to the Cover Amount is burnt on a proportional basis.Q10. Could you introduce the milestone events of Soteria ?
Soteria,
✅ On January 13, Soteria officially launched the market.
✅ On January 19, Soteria launched the insurance service for PancakeSwap users, and the number of members increased to 590.
✅ On January 20, the insurance service provided by Soteria for PancakeSwap users reached 500,000 SOTE in 5 hours.
✅ On January 21, Soteria started IFO, over-raising the funds of 22.7 times, breaking the record in the PancakeSwap’s history.
✅ On January 25, Soteria launched Barkery insurance service.
✅ On January 27, Soteria officially started the Blink insurance function.
✅ On January 29, Soteria cooperated with Sphinx and started the insurance function.
✅ On February 1, Soteria cooperated with BSCEX and started the insurance function.
✅ On February 4, today MCR exceeded 30,000 $BNB which was set at launch.
✅ On February 5, Soteria Mutual Active Cover Amount Surpassed $1,000,000.
✅ On February 7, Soteria cooperated with dForce and started the insurance function.
✅ On February 7, Soteria cooperated with dForce and started the insurance function.
✅ On February 9, Soteria Mutual started hot staking activity with bakeryswap with more than $30,000.
✅ On February 10, Soteria members exceeded 5,000.
TWITTER QUESTIONS
Q1. From @ApaguJohan
Soteria Mutual is built on BSC. Does that mean you will provide insurance service for only the projects on BSC chain or do you also serve to other blockchains? If yes then on how many blockchain are you planning to provide
services?Soteria,
We can provide not only BSC chain and other blockchains too. We are planning to provide insurance services for most blockchain projects.Q2. From
Can you explain to us in details about your “risk protection capital” model? What is the minimum Capital requirement ( MCR) to have an impact on the price of SOTE?
Soteria,
The MCR is the level of funds required to be very confident all claims can be paid. MCR will have a fixed minimum value that will be set at launch. The ratio of capital pool to MCR is MCR%. From the formula, we know that in the short term MCR% rises, SOTE price rises, and if MCR% falls the price of SOTE also falls. When a member swaps BNB for SOTE, the capital pool increases. Similarly, when a member purchases cover, it increases the capital pool, so the price of SOTE will rise. On the contrary, when SOTE tokens are redeemed or a claim is approved, the capital pool will decrease, so the price of SOTE decreases.Soteria MCR exceeded 30,000 $BNB which was set at launch
The MCR represents the minimum amount of funds the mutual needs to be very confident it can pay all claims.
#Soteria Mutual is moving to the next level
Q3. From @zambrano_li
Most projects choose Ethereum blockchain to work on. Can you highlight the main reasons for your decision to work on BSC? Which features offered by the BSC are the most convenient for Soteria?
Soteria,
From the users perspective why Soteria shows BSC are,
✅ A rich and growing digital asset ecosystem powered by Binance DEX, the leading decentralized exchange
✅ Cheap transaction fees that reach as low as 1 cent
✅ High performance with a network capable of producing a block every 3 seconds
✅ Cross-chain DeFi mechanisms that increase DeFi interoperability
✅ A supportive Binance ecosystem that funds and bootstraps many DeFi projects
✅ A growing ecosystem of millions of users across Binance.com and Binance DEX
✅ A network of major crypto projects already collaborating with BSC
✅ A supportive Binance ecosystem that funds and bootstraps many DeFi projects
✅ A growing ecosystem of millions of users across Binance.com and Binance DEX
✅ A network of major crypto projects already collaborating with BSCQ4. From @HarputluResul
What is Soteria’s role in the Binance DeFi ecosystem? What different task will Soteria take on?
Soteria,
Soteria is a blockchain based mutual to share the risks of Defi, benefits are Capital Model, Investment Return, Cover Pricing, Claims Assessment, Membership, Governance. SOTE token use cases are Purchase Cover, Claims Assessment, Governance, Risk Assessment. Soteria is a decentralised alternative to insurance and is the first mutual (a risk sharing pool) on the Binance Smart Chain (BSC). We’ve used blockchain technology to create a platform which returns the power of insurance to the people. It not only utilizes the fast transaction speeds of BSC, but it is also highly integrated with the BSC DeFi ecosystem. It allows anyone to become a member and buy cover, and greatly diminish or reduce the financial risk of hacks. It replaces the idea of a traditional insurance company, because it is wholly owned by the members. The model encourages engagement as members receive economic incentives for participating in Risk Assessment, Claims Assessment and Governance.
After the hype of DeFi, we understand the risk involved in it. Smart contracts increased risk in the DeFi world needs decentralized solutions. That’s how the Soteria projects begins as a blockchain-based mutual to share the risk of DeFi.Q5. From @PhuLe26224707
What is business model of Soteria Finance? How it works? And Who are your potential customers and which markets are you targeting on?
Soteria,
Soteria is run by community members. Clients are decided by the members, not by the insurance company. I’m sure the economic model of Soteria driven by the SOTE token will ensure claim handled for mutual long-term growth. As many of us finds a way to attract capital to back the risk, Soteria full fills it by rewarding the capital continuously. Also, members invest conservatively hold the capital until claim occurs and could earn additional returns if no claims. Likewise they have an attractive strategy for cover pricing claim assessment membership and governance. For more details kindly visit: soteria.finance. This is how we attract community members and investors.
TELEGRAM QUESTIONS
Q1. From @kalamw
Very little public confirmation of project progress. Can you share the current progress of #Soteria Mutual project?
Soteria,
For more information, please follow our Twitter https://twitter.com/SoteriaFinanceQ2. From @zetly11
Reading about Soteria I realized that you have a Native token ( $SOTE ) and a Wrapped version ( $WSOTE ), so can you explain why do you have 2 types of the same token?
Soteria,
Soteria Mutual launched with an initial 10,000,000 SOTE tokens. The below graph shows the SOTE token distribution. The SOTE token is bonded tightly with the internal economics of Soteria. On one hand, the price of SOTE reacts to the prevailing conditions and capitalisation levels; On the other hand, SOTE is distributed to reward active members for participating in risk assessment, claim assessment, and governance. Membership rights are represented by SOTE tokens. All funds raised from token purchases belong to the members. Soteria uses a Continuous Token Model, also referred to as a bonding curve, which means SOTE can be purchased and redeemed directly through the platform. WSOTE is a 1-to-1 backed token that can only be generated by wrapping genuine SOTE. SOTE can only be traded among members, WSOTE is fully tradeable but can’t be used at all within the Soteria platform.Q3. From @Prof_Rz
🌻What is “Claim Assessment”? Why an regular user should become a Claims Assessor?
Soteria,
A decentralized way of checking claims. The Claims Assessors earn rewards for voting with the consensus outcome. If anyone is deemed to have voted fraudulently, their stake may be burned via the Governance process.
Q4. From @washinch
While you build Soteria Finance project, do you take into account community feedbacks and demands?
Soteria,
The concept of insurance comes from communities in the past that pooled their resources to protect each other from the risks they all faced. The more people in the pool the better it works as the numbers become more reliable. But this method wasn’t scalable because it is a trust-based system and the network of individuals trusted by everyone in the pool only extended so far. Hence traditional insurance companies emerged.When BSC grew to become the second-largest DeFi ecosystem in just a few months, we realized we could apply our smart contract knowledge to our passion for decentralized technology. We believe Nexus Mutual’s mutual model is the best choice. We build a mutual where individuals only need to trust the system, not everyone in it.
Q5. From @Ketz23
DeFi project is very popular and there are many DeFi projects right now, what are your plans for now? what makes $SOTE unique ?
Soteria,
Different from other insurance projects, Soteria’s economic model stimulates public participation in risk protection capital, and MCR (Minimum Capital Requirement) guarantees that when a claim occurs, it can be fully paid. The formula in the smart contract sets the SOTERIA price to be linked with the risk protection capital. The more adequate the risk protection capital, the higher the SOTE price. As capital decreases, the price of SOTE will decrease, but it still needs to meet the minimum requirement of MCR%.According to this logic, as long as the platform can incentivize more users to pledge tokens, the value of SOTE tokens will increase, and the purchase demand will increase sharply, realizing the positive cycle of the Soteria ecosystem, promoting the development of the platform, and further protecting the DeFi ecosystem development and the benefits for its users.
- Telegram : https://t.me/SoteriaMutual
- Twitter : https://twitter.com/soteriafinance
- Website : https://soteria.finance/
- Github : https://github.com/Soteria-core/soteria
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