Day By Day are revolutionising the insurance industry with Web3, and will soon launch the next phase onto our testnet: our DeFi underwriting solution.

DeFi investors will be able to contribute to liquidity pools that will be responsible for supporting the insurance coverage of assets registered through all NFT policies. In this article, we will give an explanation of the workings of the platform.

Launch of the Underwriting Phase

Having already launched the “insurance policy NFT minting” phase, which enabled users to become policy makers and earn passive income when someone buys coverage, the Day By Day team are excited to launch the next phase.

Liquidity pools that are invested into through the underwriting part of the platform will make it possible to provide coverage to insurance customers who are using the minted NFT policy contracts to protect their assets.

This signals a new era of decentralised insurance, allowing anyone to invest through DeFi to be a part of the procedures and profits of insurance.

If an insurance customer submits a claim event against a certain policy, these pools will be responsible for providing the necessary liquidity.

This efficient system will mean people can secure their assets, with peace of mind and absolute guarantee thanks to blockchain and smart contracts.

Day By Day’s platform provides total transparency through our powerful smart contracts, meaning we can ensure that exact insurance coverage is always available due to being underwritten 1-to-1.

Operation of the underwriting module and launch of the first liquidity pool

Day By Day have chosen the Algorand blockchain to initially launch our underwriting module. The first underwriting pool Day By Day are launching on Testnet will be the faucet goUSD pool as part of our partnership with Algomint.

This decision means our web3 insurance platform will have all the necessary security guarantees for the execution of underwriting. Algomint also provides an easy faucet interface so that our initial users can quickly get goUSD to test with.

The underwriting module is designed to create a common pool of contributed funds, which anyone can add liquidity to. Contributors will receive an LP token with their contributed % of the pool and can add more funds to this token at any time. To sell their % of the pool, LP token holders can resell them in the LP token marketplace.

Contributors will never have their funds completely removed by claims as the pool ensures there is always a 1:1 cover for the assets which have bought insurance in the pool.

Funds that are locked to cover assets which pass their insurance period without a claim will go back into the pool as passive income rewards to our LP token holders.

Following the same format, future pools will be launched to continue to provide the necessary support for the NFT policies.

DeFi for insurance (InsureFi) is an innovative and disruptive use case for Web3 technology with Day By Day leading the charge.

What will the process be like to provide liquidity to the first pools?

As soon as the underwriting module is launched on Testnet, users will be able to start providing test liquidity to the first pool through goUSD’s faucet.

The first step is to go to the Algomint platform and get faucet goUSD sent to your Algorand Wallet in testnet mode.

After you’ve received your testnet goUSD, you will be able to contribute to the Day By Day testnet underwriting module. You will find a simple interface where you can choose your desired contribution amount to the pool.

In this way, users can learn the steps to becoming an insurance investor, so that when we launch underwriting to mainnet, you’ll be able to start investing straight away to earn your daily rewards!

About the “DBD LP” asset and liquidity guarantees in the pools

As part of simplifying insurance for all users, whether a customer, policy minter or underwriting investor, we have developed the “DBD LP”, which underwriting contributors will receive after contributing to an underwriting pool.

Through this DBD LP, you will be able to see real-time metrics of your contribution including:

• The value of your LP
• The rewards your LP has earned over the past 24 hours
• The total value locked in the underwriting pool
• The total supply

This asset combines the best of NFTs and LP tokens to generate the best user experience for insurance on web3.

In order to provide the necessary security to the insurance platform and guarantee that the policies are never left without coverage, users cannot withdraw their liquidity once the contribution is made, but they can sell their position to other people by reselling the “DBD LP” on the LP marketplace. In this way, support for minted NFT policies is guaranteed at all times and a form of trading is offered to investors.

Day By Day takes security within the platform very seriously, which is why it has developed a mechanism to guarantee that there are funds available to support the insurance cover, even in the occurrence of a blockchain, exchange or wallet hack by malicious actors.

A percentage of the contributions made to the underwriting module and from insurance customers is allocated to a cold wallet, which protects any underwriting pools in the event of a possible hack.

Final words

We hope that this introduction has helped you to understand the flow and features that are coming to Day By Day. Once underwriting is launched on Testnet, we will provide more details and a how-to guide in our Docs.

A reminder that you can mint NFT policies with a 20% discount by burning 10% of the mint price in DBD tokens. Don’t miss it! app.daybyday.io/mint

About Day By Day

Day By Day is decentralising and democratising the global insurance industry. Using emerging technologies, the first insurtech platform of its kind, enables a new era of insurance entrepreneurs to influence investment, while providing on-demand, hyper-personalised insurance products for clients.

Insurance entrepreneurs can create insurance policies (NFTs) that generate passive income and/or invest in underwriting pools (DeFi) to earn a return on investment.

The InsureFi industry will provide next generation insurance that is private, transparent and accurate. Built on blockchain and using AI, Day By Day removes the current insurance process’ administrative constraints to deliver value and security to customers.