Detailed Plan
Fundamentally, an insurance model is an instance in which individuals pool together small increments of money so that if any one member of the group were to face catastrophic loss, they would be covered at relatively little expense to others. Insurance companies pool funds from policyholders, collect substantial fees for service and derive profit from the amount of money that remains in the pool after expenses/services have been rendered. This has a few implications. First, it makes it incentivizes company to deny claims and thus compromise the quality of life of many policyholders. Insurance underwriters, motivated by the company’s incentive to maintain the pool of money as large as possible, in order to maximize profit, will structure insurance policy in ways that will lead to a greater number of insurance claim denials, rollbacks, delays and restrictions. These profit incentivized insurance companies make use of basic precedents for declining service such as denying on the basis of pre-existing conditions. When someone is categorized as having a pre-existing condition, they can be denied coverage, charged a more expensive premium, or have treatment for their condition excluded from coverage. The issue with their behavior is not only that it leads to suboptimal health outcomes for many people but that it’s almost impossible to regulate and penalize under the current legal system. This is because insurance companies are openly for-profit entities that measure success in terms of how much money they generate as opposed to how many people they serve and the quality of healthcare they help these individuals achieve.
The BPX team wants to use economically efficient distributed consensus mechanisms to democratize healthcare by making it a sustainable, community governed pool.
We will use a distributed/immutable ledger to perform the arbitration functions within the insurance fund and restore leverage to the policy holder. Insurance is a model that should serve the public, not private interest that is solely incentivized by profit. The BPX team is motivated to deliver a product that will lead to greater access to healthcare as well as access to higher quality providers at efficient market rates.
Our token is focused on providing utility to the BPX community and thus will be built using a continuous token model. (constant sum product formula; X + Y = K). Our continuous token models based on the bonding curve concept will help avoid overvalued ICO token prices, market manipulation, illiquidity and a market prone to slippage. Furthermore our token will have strong tokenomics as we have tangible demand for the underlying network token (BPX). We will do a parametric air-drop to token holders, and have staking functionality. Changes to the governance will be voted on by the token holders.
this protocol design reduce information asymmetry because it is deterministic and predictable; as more people bond to the curve, the token price goes up, meanwhile if they decide to unbond, the token price goes down. By holding the BPX token, the person is signaling that they they see use in being part of the decentralised insurance network.
Simply put, bonding curves describe the issuance of new tokens each time capital (in this case ADA) is sent to the token contract. The token contract holding the ADA is referred to as the Reserve and its ratio against the tokens in circulation delineates price sensitivity. Conversely, existing tokens are burned (or destroyed) each time they are redeemed for capital (ADA) back from the token contract. So, If you take from the reserve, you get your ADA back and the token you sell is destroyed. Bonding curves are deterministic models that predictably allow for the price of tokens to increase when new tokens are purchased, and decrease when existing tokens are redeemed. This is where the concept of continuous pricing comes from
The network token BPX represents membership rights (which are used to buy insurance coverage), determine governance (changes to community or protocol), as well as a claim to the pool’s capital. With that in mind, as the fund’s capital pool increases, the value of BPX increases relative to the curve. While memberships rights are the core value proposition for BPX, the token is also used for governance over improvement proposals, claims assessment on any insurance claims, and risk assessment on smart contracts.
This will eliminate unfair practices carried out by insurance companies such as delaying or denying insurance claims in order to maximize profit and will lead to what insurance should be; a decentralized infrastructure enabling pools of people to collaboratively hedge against the risk of a contingent or uncertain loss.
Our solution provides an infrastructure for pools of people to hedge risk against catastrophic loss of any chosen asset class. Using our platform, users choose the asset class they wish to insure, create the rules for assessing claims, and contribute in equal proportions monthly to the fund pool for the asset class. Additionally, usage of blockchain technology maintains transparency that no single node is exploiting the pool, and so that each node in the network is informed of settlement withdrawals.
We aim to use blockchain technology to help make the purchase and sale of insurance more efficient, enable lower operational costs, provide greater transparency /efficiency into the industry and democratize access to reinsurance.
Project budget breakdown
back end development: $13000
front end development: $6000
marketing: $8000
token economics audit: $3000