Proposed Utility title.
Olympus - Insurance
A Crowdfunding-based Insurance: A similar application to a staking mechanism except that the staking pool will provide liquidity for vetted and select “insurance claims” by community members.
The indemnity/reimbursement will be distributed to Ohmies that apply for a financial support that will be in the form of an insurance claim reimbursement for expenses such as Medical Bills or Car Damage/Repair Bills, which will need to be proven and authenticated via an audit/verification process made internally and/or by a third party.
In other words, this solution will act as a piggy-bank for Olympus Holders and only those proven to be legitimate claims for reimbursement, will be allowed a % of the money staked and collected. Similar to GoFundMe but in a DeFi Protocol & DAO format.
Lack of crowdfunding and insurance based applications/protocols in DeFi, especially as a utility in a lot of DeFi/Rebase Protocols.
Lack of sustainable utilities that have a direct and straightforward benefit on a holder's life.
Retail investors have always turned to the Crypto Market as it offers a wide variety of innovative financial solutions that offer higher returns than TradFi, and as Crypto and global markets are tumbling and drowning in FUD, the need for a utility that backs up consumer spending is even more important.
Business Model - How it works
A Crowdfunding-based Insurance: The solution will function very similarly to a staking utility, where funds will be staked and collected. But instead of holders benefiting only from the staking yield, they will also be allowed a % of the collected funds upon applying for a “claim reimbursement” to financially support finances such as medical bills and car damages repair.
This utility will constitute a crowdfunding pool which will work as an insurance/reimbursement community fund for a variety of insurance claims, mainly, health and vehicle insurance.
The Bills in questions will go through a verification process to ensure that applications aren’t fraudulent and fake. This process can be done either internally by members from the Olympus Team and/or by a third party such as a specialized Claims Adjuster or a Consulting firm.
Ohmies will stake their Ohm Tokens into this Pool for a low APY (to be determined in a later phase). According to how much they staked (equivalent of insurance premium), they’ll get a respective coverage percentage from the total amount staked in the pool (if their claim was proven to be legitimate).
A holder deposits X amount into this pool. He gets in turn a 1 in 100 coverage rate.
Later on, this holder applies for reimbursement funding for a Medical/Car Repair bill.
He will go into a web-app where he writes up and explains his case, and uploads the required documents that proves the legitimacy of his claim.
After the verification process (can take a couple of weeks to a couple of months) for all the documentation required to prove the legitimacy of this bill’s reimbursement, and if approved, this Ohmie will be eligible for 1% of the total reimbursement amount staked in the pool.
According to more calculations that can be determined in a later phase, there will be limits and thresholds to the allowances per types of claim, for instance:
- Medical Bills:
Type of procedure to be reimbursed. E.g: Consultation, surgery, medical tests, medication… Etc.
- Car damage repair:
Type and extent of damage, type and/or class of car… Etc.
Profitability & Sustainability factors
The fund can keep growing through time when holders keep depositing Tokens into it (given good marketing) to increase
Their yields on the amounts they deposited.
Their premiums and accordingly, their allowances.
The pool will only decrease in its amount when reimbursement funding applications are approved and cleared, or, in the event of a selloff.
However, the growth of the pool should exponentially exceed the decrease, and that is for two reasons;
First, verification processes will take time and therefore reimbursements won’t be immediate.
Second, not all applications for funding will be approved as it’s expected that a percentage of the applications will turn out to badly filed be and will then require more proof and time to be verified, or outright fraudulent and fake and will then require actions like a strike or complete ban from this Utility or the entire Protocol.
A third reason can be added, which is imposing a 1-2 month wait period requirement for first time applicants to help prevent potential grifters and scammers from damaging the solution and actual holders, and to ensure that all applicants (or at least most) are real old time holders and loyal community members. This same strategy is used by a lot of insurance companies.
Business Model Illustrated
The main development aspects and process of this solution should be built and made on-chain and off-chain at the same time:
Note: The development aspect of the web app should include a KYC process where the holders wishing to benefit from this solution, signup and create their own accounts on the web app, provide an ID document to prove their identity, link the wallet address they used to deposit their tokens into the fund. The same wallet will later be used to receive reimbursement payments.
This process will facilitate the claims verification process and help ensure that it’s a fair, transparent, scam-free solution for all holders.
How will the proposed solution benefit Olympus DAO
This utility can:
Bring revenue to the protocol.
Decrease the Inflation of Olympus Tokens.
Bring in more Holders and make them stick around for a long time.
There are currently no other DeFi/ Crypto projects with an identical utility.
However, there are projects with somewhat similar utilities.
NFT Community Wallet: Used across a lot of NFT projects with 2 main use case options:
A Community Wallet funded by a small percentage of trading fees on secondary trading platforms (OpenSea, Magic Eden, …).
It’s used mainly to buy/trade popular NFTs (or Crypto) to use for community raffles and giveaways, and to burn popular NFTs for “fun” during “NFT Wars”.
Source/ Example: https://medium.com/ninja-squad/trading-with-the-community-wallet-explained-d12f1a98f733
A built-in community wallet into NFT marketplaces to financially reward active members for their participation and engagement.
Source/ Example: [https://mirror.xyz/antho1404.eth/SGrk-YZgQjK0PPtOA6xx98plRpAcM1MNnJMLOBj4qo4>
A DeFi protocol based on the “Savings Rounds” concept: [https://bloinx.io/>
A rotating savings and credit association (ROSCA) is a group of individuals who agree to meet for a defined period in order to save and borrow together, a form of combined peer-to-peer banking and peer-to-peer lending.
Rotating savings are most common in developing economies or among immigrant groups in the developed world. They are also a popular alternative to lending products in Muslim countries, where any interest paid or received on loans is considered impermissible based on Islamic finance rules.
ROSCAs have appeared in South America, Africa, and Asia. An early example existed in China in about 200 B.C.
The project, “Bloinx”, has a twitter page that’s been inactive since February 2022 with just 210 followers, and a discord server with only 19 members in it.
A Web3 Crowdfunding protocol: [https://securitize.io/>
Securitize is a Digital Asset Securities firm. Providing a crowdfunding solution for investors to raise capital and participate in funding rounds of startups and companies.
This utility proposal is unique and original in its use case.
Unlike many solutions/ protocols in this industry that focus on providing insurance and crowdfunding solutions to companies/ startups/ other protocols, this utility is actually focused on providing the aforementioned solutions directly to the individual holder/ member. Which will be first in this market.
Being first should leave little to no room for competition at the early stages of launching this utility, and just like how OlympusDAO was the first ever Reserve Currency and high APY staking protocol in crypto, it can also be the first ever to provide this use case.
However, the biggest challenge will be in delivering the promised process for this utility, especially in terms of the verification process.
We can also expect to face a very high level of competition at later stages if this utility gets forked/ copied similarly to how Olympus’ Reserve Currency staking model got forked.
Success metrics & KPIs
Number of transaction (deposits) made in the utility and $ value of deposits made in the utility.
- Olympus DAO market value
Market Cap growth
Token price increase
Token trading Volume
- Community growth
Number of new Ohm Holders per wallets
Number of new members on discord
Number of new followers on Twitter and engagement analytics
Frequency of community engagement/activity on discord