Income Premium and Tokonomy
Last updated
Last updated
There are going to be two sources of income at the start.
The first comes from the purchase of Growing Pains NFTs, with royalties as a start at 50%, given now that we are a 50% Art Project and 50% insurance pool.
And the second comes from renewal premiums — either by staking a minimum amount of ADA to our pool, or directly paying a premium to the insurance pool.
Royalties will at start be set at 50% royalties, Below is a graph showing the disribution of the royalties and, the bounty and processing claims’ fees for the Claims team.
Here is the cycle of the Tokenomy of Pains: 100% of the royalties, staking rewards, advertisement revenues, and grants will be allocated to the reserves, minus 20%, which will go to the underwriting process. This process will be compensated to underwriters who develop the policy and handle manual onboarding, as well as to Xuberus and Crowed Trends for their analytical services. Costs like marketing, server upkeep, and backend development will be sponsored by Pains and FIDA.
The reserve will then be used to pay claims and claims investigation costs, which can vary. Declining claims based on terms and conditions can be streamlined, a skill set that can be quickly trained. The cost for this will be minimal, around 2.5% of the claim limit. For example, if a claim of 1,000 ADA is reported but does not meet the terms, the claim will be declined, and the reviewer will receive 25 ADA. However, fraudulent or malicious claim reporting might require more investigation time and expertise, which is not abundant in the ecosystem.
The surplus, after paying all fees and liabilities, will be redistributed among holders and sellers who still hold a Pains NFT. A new cycle of insurance will then begin. Of course, surplus accounting will be postponed, as we expect to receive more claims than royalties, at least for the duration of the pilot.
Of course if the pool grows and stablizes we can then advance to the next phase of the project and offer the SME product for crypto projects, all earnings will be pushed to the treasury and the real gains for the Pains holder starts. Some of these covers will include (future products)
Cyber Liability Insurance: Protects against losses from data breaches, hacking attacks, and other cyber threats.
Directors and Officers (D&O) Insurance: Protects company executives from personal liability if they are sued for alleged wrongful acts in managing the company.
Professional Liability Insurance (Errors and Omissions - E&O) Covers claims of negligence or failure to perform professional duties.
Crime Insurance: Protects against internal theft, fraud, and other crimes committed by employees or third parties.
Smart Contract Failure Insurance Protects against losses due to bugs or failures in smart contracts.
Custody Insurance: Protects assets held in cold or hot wallets from theft, fraud, or other security breaches.
Token Loss or Theft Insurance: Provides protection for the loss or theft of cryptocurrencies, typically during transactions or storage.
Property Insurance: Protects physical assets such as servers, equipment, and data centers.
