BACKED is introducing the first peer-to-peer insurance protocol for the crypto world and crypto-assets. By leveraging smart contracts, the platform can create and host many insurance contracts between the insured and insurers in the network.
This platform is the pioneer insurance service provider for crypto and is introduced when there is an increasing need for excellent insurance partners for crypto.
The Rising Need for Crypto Insurance
Recently, there has been an increasing need for insurance against assets related to the crypto world in the past. Crypto assets are among the most profitable financial assets, yet they carry the most significant risk compared to stocks and real estate assets.
Bitcoin and Ethereum since January have enjoyed a market bull run that led to doubling, tripling, and even quadrupling in prices. Generally, many investors made super-profits by hodling the two assets. In mid-April, Bitcoin was priced at $64 thousand, and Ethereum was priced at over $4k.
Today, at the time of writing, the prices of Bitcoin and Ethereum are merely half of what they were 2 months ago. For instance, according to coinmarketcap, Bitcoin trades at $32k, and Ethereum is trading at $1.8k. Notice that these price drops have occurred in less than 2 months, and in the case of Ethereum, one month.
Crypto assets are highly volatile, and as such, investors need protection against losses in the value of these assets. Therefore, there has been a need for insurance in crypto assets. BACKED Protocol’s launch will help protect investors against the many failures that they may face for treading in crypto.
Backed’s Decentralized Crypto Insurance, How does it Work?
The Backed network is leveraging the power of smart contracts to introduce decentralized insurance services. Insurance in BACKED is highly simplified for the benefit of the average user.
Foremost, the Insurer/insured creates their insurance contract proposal on the BACKED network. This creation primarily involves modifying the preset parameters like the crypto pair, the maximum threshold of loss, insurance cover amount, duration, guarantee value, premiums, and frequency of paying the premiums. Each contract in the BACKED network is fully decentralized, customizable and trustless, and autonomous.
After making the contract, it’s saved in the blockchain, where users searching for contract options will access them. An individual looking for a contract will receive a list of insured-created contracts and insurer-created contracts and select their option from the information.
On the part of the insurer, once they have selected the contract of choice, they put some amount of stablecoins as the insurance cover, and the smart contract starts self-executing. If the contract requirements are not respected at some point, then that could be grounds for ending the contract by either party.
The Relevance of BAKT Token
The BACKED network is launching with a native token BAKT, the primary asset involved in service provision. Holders of this particular token will benefit highly from the services provided by the platform. This token will help pay fees, where for each premium payment, 10% is taxed. The tax is burnt, making the BAKT token deflationary in the long term.
BAKT will also help in the governance of the platform; hence it’s a governance token. Holders will vote on updates and improvements to be made in the ecosystem to streamline the insurance services. Even more, because of the community governance, the BACKED protocol will attain complete decentralization.
Participate in The Upcoming Presale
The Backed insurance protocol is hosting its presale soon on 28th June with the primary objective of attracting investors using the BAKT. It aims to raise at least $400 ETH by selling BAKT of the equivalent amount.
This presale will start at exactly 13;00 UTC, with the minimum and maximum contributions per wallet being capped at 0.1ETH and 1ETH, respectively. The valuation of BAKT is as follows, 1ETH is an equivalent of 95,327BAKT.
BACKED will list BAKT tokens in exchanges once the presale ends.