SafeZen - the future of insurance

📌 SafeZen is building the world’s first revolutionary truly decentralized insurance product with two major peer-to-peer insurance models- a zero-premium insurance model backed by community participants, and a pay-as-you-go insurance model backed by underwriters and governed by the SafeZen community members.

📌 Our project vision and mission is to:

• to decentralize the insurance industry which is currently dominated by large institutions,
• promote transparency within the system,
• redistribute the governance power back to the community, and
• offer a wide range of innovative insurance products at a minimal cost to our global community while always ensuring and maintaining solvency within the system.

📌 What differentiates SafeZen from traditional and present de-fi insurance protocols? A. Introducing the world's first innovative insurance products: a. Pay-as-you-go insurance model: Only pay when you need the insurance. b. Zero-premium insurance model: Interact with your favorite defi project via SafeZen and get covered with risk-based pools in case of an unfortunate unseen event, and that too paying zero-premium. c. Advantage pay-as-you-go insurance: Interacting with various defi protocols, pay less for the same insurance coverage, offering a better premium to the underwriters for a minimal risk increase.

B. Most of the decentralized insurance platforms have speculative tokens, which can be used to stake and underwrite the insurance, and with speculation comes the greater risk of the underwriters losing their whole staked amount.

C. Risk-based coverage pools: None of the decentralized insurance platforms have risk-based coverage pools, that can offer better protection to the underwriters, in conjunction with the non-speculative algorithmic-based token.

D. Most decentralized insurance platforms are not truly decentralized, and their governance and claims are governed by the advisors of the platform.

📌 But why do we need to decentralize the insurance industry? Satoshi Nakamoto, a pseudonymous person or group, developed Bitcoin to decentralize the power of the banks in the wake of the 2008 global financial crisis. If we look at the events closely, insurance providers like AIG, the then-largest insurance provider were equally responsible for this financial disaster. AIG issued risky under-collateralized insurance to big banks, and when the housing bubble burst, AIG ran out of money and dishonored the claims made by the banks. Even with strict regulations, there is still a big lack of transparency among the policyholders, financial institutes, regulators, and insurance policy providers.

Not to say, with large institutions dominating the insurance industry, to serve their own best interests, the agents or large institutions have constantly remained focused to approve as less claims as possible and underwriting insurances even when not having funds to cover such insurances in case of genuine claims.

These traditional insurance claims were and are still subjected to a centralized verifier, are often not transparent, and remain unfair to the public. And, at the same time, delaying the insurance claim payments and unfair underwriting practices including insolvency risk leads to a lack of trust in the system.

Even for mass adoption of de-fi protocols and dApps, decentralized insurance can play a key role in mitigating the risk associated with it. Since the inception of dApps and decentralized finance apps, protocol hacking has been a major issue and had profoundly impacted the growth of this industry, and SafeZen can fix this bridge by insuring the people and spreading out the risk from an individual to a larger community against unpredicted future events.

At present, we have tens of decentralized insurance, but each of them has certain issues, which have been covered in detail in our SafeZen v1. whitepaper and SafeZen try to fix all such issues, offer the world's first innovative solutions to users, and at the same time, offer better protection to underwriters.

📌 Our proposed insurance offerings:

1. Smart contract vulnerability insurance
2. Stablecoin depeg insurance
3. Custodian wallet risk insurance
4. Parametric insurances
5. Group health insurances for web3 corporates

📌 So, what's coming up next?

1. We will be releasing our v2 whitepaper in the coming weeks.
2. Building the world's first zero-premium group health insurance for web3 dApps, DAOs, and corporates.
3. Working on our protocol documentation and smart contract audits.
4. To develop our SDK, so that de-fi platforms can integrate our insurance protocol with just a few lines of code.

Our mission at SafeZen is to ensure all individuals and their assets are protected, regardless of the chains they are interacting with. With that in mind, our project runs on multi-chains including Ethereum, Polygon, Optimism, Cronos, and Avalanche, with more chains to be integrated in the coming months.

Users interacting with our platform can insure their assets on defi-projects by purchasing our pay-as-you-go insurance, backed by underwriters, where they will be paying the insurance amount till they use it. Consider it as users activating their car insurance when they go from their home to the office, and deactivating it once they reach the office, and vice versa.
Or, user can insure themselves by depositing their assets to de-fi projects like blue-chip AAVE, Compound, and Uniswap via our platform, paying zero-premium, and if any unfortunate event happens in the future to any of the defi projects, their assets will only be liquidated based on the protocol risk pools.

Notable and Worth mentioning points:

1. The very first challenge for our project was to find a solution to mitigate the risk of the underwriters so that they can invest their capital with less fear in mind of losing out their capital. Solution: SafeZen decided to form risk-based community pools, to offer better protection and safeguard the underwriter's interest, in conjunction with our non-speculative native SZT token.

2. The second challenge for SafeZen was to define and reflect the true meaning of decentralization in our product offerings. With the implementation of risk-based pools, SafeZen kind of limited itself to certain verified community projects, and at the very core of the principle of decentralization, each and every individual or project should be able to take participate in insurance, whether to offer insurance or to avail the insurance services. Solution: If the project doesn’t get approved by the community to be listed under community-backed, the individual or project can create a project-specific pool to offer the insurance against their underwriting amount.

3. The third challenge was to build SZT tokenomics, which never can be subjected to market token speculation, and anyone at any point in time can calculate the token price. Solution: SZT tokenomics is way different when compared to traditional blockchain tokenomics. SZT tokens will be having a hard capping of 21,000,000,000 SZT tokens, with no token allocation to the stakeholders including founders, the SafeZen team members, and investors. SZT token pricing will vary based on the “YUVAA” pricing curve, which has been extensively explained in the SZT tokenomics spreadsheet.

4. The fourth challenge for SafeZen was to take care that no whale can misuse their power in the SafeZen governance decisions. Solution: The SZT tokens will be listed only on our platform for staking, and providing liquidity to coverage pools. Similar to "SZT YUVAA Tokenomics", we’ve designed an in-house algorithm for the SZT Governance token distributing governance power to the respective stakeholders. Resonating with Vitalik’s view in his Cryptoeconomics In 30 Minutes talk at Devcon5, and, the Quadratic voting model, our governance model ensures users have healthy participation. The higher we push the cost of attack, the lower the risk an attacker has enough economical resources to harm our ecosystem.

5. The fifth challenge for us was to discover an alternative for Superfluid protocol, for the pay-as-you-go model, as Superfluid only limited chains, and not even Ethereum. Solution: We designed our own customized token, sztDAI [1:1 DAI], and developed an algorithm to support capital streaming, which can work with all chains.