Announcing our strategic partnership with InsurAce, both teams will be working together to explore the application of decentralized identity technologies in the decentralized insurance use cases.
Although DeFi insurance leveraging on the blockchain technology has proven to be effective and useful, it can be further improved if more identity information can be applied to tackle some of the challenges.
Challenges in decentralized insurance protocol
Although blockchain technology can prevent the identity profile from being monitored, its pseudo-anonymous nature creates additional issues which compromise user’s experience and fail to meet legal requirements.
- Insurance protocol is not able to identify humans from a tremendous amount of anonymous addresses.
- They cannot detect suspicious users such as hackers and money-launderers which may lead to fraud activities.
- They cannot assess users’ risk profiles to customize insurance premiums for individuals.
- They cannot monitor user behavior on a continuing basis and therefore cannot optimize risk management strategy.
Litentry’s DID technology to empower insurance protocol
Under this partnership, Litentry will provide a privacy-computation-based KYC/AML identity service to InsurAce, the purpose is to verify the identity of its clients and assess their suitability, along with the potential risks of illegal intentions towards the business relationship. The data is signed by third party institutes, and could be verified by providing zero knowledge proof This will make sure one can perform computation and analysis of users’ data without compromising privacy.
Moreover, InsurAce will integrate Litentry’s innovative DID aggregation API and computation model, which will help them to better understand on-chain behaviors of insurance buyers and hence their risk profile. This risk profile would be used to set premiums for different users based on sophisticated algorithms.
InsurAce Protocol is a Singapore based DeFi Insurance protocol that has quickly become the second largest protocol in DeFi insurance. At the time of writing, the protocol has a $40 million market cap based on a circulating supply of 8 million INSUR tokens. There is a maximum release of 100 million INSUR Tokens which can be mined through staking on the protocol.
InsurAce is a new decentralized insurance protocol, to empower the risk protection infrastructure for the DeFi community. InsurAce offers portfolio-based insurance products with optimized pricing models to substantially lower the cost; launches insurance investment functions with SCR mining programs to create sustainable returns for the participants; and provide coverage for cross-chain DeFi projects to benefit the whole ecosystem.
Litentry is a cross-chance Decentralized Identity (DID) Aggregator that enables the linking of user identities among multiple decentralized networks. Built on the Substrate framework and featuring a DID indexing protocol, Litentry provides a decentralized, verifiable identity aggregation service that removes the redundancy of code and the hassles involved in resolving agnostic DID mechanisms. Litentry’s DID Aggregator is compatible with all DID standards, and powered by a reliable DID data interface. Everyone can build and submit DID methods to Litentry, making identity data easily accessible in the Web3.0.