Athena Ins — a digital Guarantee system allows everyone to contribute their capital to bring guarantees in the DeFi and earn rewards
BTS Labs held an AMA with Athena Ins on April 28th. The guest we had was Côme, the CTO of Athena Ins. He introduced that Athena Ins is the next level of decentralized insurance powered by the Ethereum network that allows everyone to contribute their capital to bring guarantees in the DeFi and earn rewards.
Q1:
BTS Labs: The field of insurance involves risks, what are the means that Athena proposes for the users of the protocol to protect themselves against capital losses due to compensation?
Côme(CTO of Athena Ins): In order to avoid too much capital exposure, Athena has set up a non-proportional reinsurance system.
This system proposes to the guarantee providers (“insurers”) to protect their capital by paying a fee (or part of their rewards) and thus minimizing their losses in case of a claim.
For example, with a reinsurance system covering losses above 15% : if users who purchased Policy files a claim equal to 45% of the guarantee pool and these claims are accepted by our claim validation partner, then the amount of the compensation will be taken from the guarantee pool and therefore taken proportionally from the capital of each guarantee provider, so the loss will be 45% per non-reinsured guarantee provider. The collateral providers who will have opted-in for reinsurance will only have a loss of 15%, the remaining 30% will be charged to the reinsurer.
Q2:
BTS Labs: What kind of guarantee policies will Athena offer?
Côme(CTO of Athena Ins): Athena will offer guarantee policies on loss of funds due to smart contracts bugs or hacks, but not only losses of crypto assets, a special pool to guarantee NFTs will be set up, as well as guarantee policies with traditional partners insurance structures on physical assets like a house !
Q3:
BTS Labs: What are the advantages of this protocol for a user who wishes to obtain income compared to a lending or farming protocol?
Côme(CTO of Athena Ins): Many protocols offer users very interesting incomes based on liquidity mining programs but these are often ephemeral or are accompanied by the impermanent loss system which often leads to less attractive results than those displayed.
On the Athena protocol the guarantee providers are remunerated with the premiums paid by the users who bought a guarantee policy and not by the protocol and its governance token or any unlimited token. The guarantee providers provide liquidity in stable coins and are remunerated in stable coins which has the effect of reducing the exposure of users to the volatility of the market and of considerably reducing the selling pressure on the governance or any other token.
Q4:
BTS Labs: How does Athena differ from the competitors in this field?
Côme(CTO of Athena Ins): All the points mentioned above are major differences and we could add the decentralization of the claims validation system or the primordial role of the community on the DAO aspect. Athena offers another advantage which is the leverage effect.
It will be possible to propose multiple guarantees with the same capital.
Example: A user who has 10,000$ of capital can deposit 10,000$ of guarantee on protocol “A”, collect the premiums paid during the purchase of policy equivalent to 2.5% APR and at the same time “deposits” his 10,000$ in guarantee on protocol “B” to receive a return of 4% APR this time, identically with protocol “C” for 4% APR, and with protocol “D” for 3% APR and with protocol “E” for 6% APR.
The guarantee provider will thus be able to cumulate the returns on different guarantee pools, in the example above it arrives at a total of 19.5% APR by providing guarantees on 5 protocols.
Q5:
BTS Labs: Are there any protocols integrated with Athena’s?
Côme(CTO of Athena Ins): Yes we have integrated Kleros, a decentralized arbitration protocol, for the validation of claims. As said in the previous question, the validation system is entirely decentralized, Athena has no control over the validation of claims, the community validates or rejects these claims through Kleros protocol.
We have also integrated the AAVE protocol, the guarantee funds will be transferred to the lending pool so a user who deposits guarantee funds on Athena will also benefit from the AAVE protocol rewards.
Free Questions
Q1:
BTS Labs Community: What is your plan for attracting new consumers to your system and keeping them longterm?
Côme(CTO of Athena Ins): We expect to cover more and more protocols, which will attract new users looking to hedge their positions, as well as new collateral providers looking to earn higher income in exchange for taking risk. Signing partnerships with DeFi players will also popularize Athena’s services.
Q2:
BTS Labs Community: Can you tell us about some compelling features for Athenains ?
Côme(CTO of Athena Ins): The main feature of the Athena protocol is to cover itself in case of loss of funds due to bugs or hacks.
Athena also offers various features for collateral providers such as reinsurance or the leverage mentioned above
Q3:
BTS Labs Community: What encouraged you to initiate this project? Could you share three main killer advantages that makes you more competitive than others?
Côme(CTO of Athena Ins): We have seen a strong user endorsement of DeFi protocols over the past two years, which has reinforced the need for ever greater protection in this sector and the growing adoption of DeFi will only increase this demand.
The three major advantages that differentiate us are the decentralization of the protocol and of the claims validation system, the leverage (the possibility of covering a large number of protocols with the same capital and therefore accumulating revenues), the reinsurance (the risk of capital loss is limited with the reinsurance users taking responsibility for compensation in excess of a certain amount), and the fact that the returns are in stable wedge form, which makes it possible to have returns that are not subject to market volatility and that the capital of each guarantee provider will also be placed on AAVE in order to obtain additional income.
Q4:
BTS Labs Community: What is the benefit of owning the ATEN token?
Côme(CTO of Athena Ins): The advantage of owning the token will allow :
Obtain additional revenue by providing capital, and earn higher yields when buying a premium.
ATEN is also used for Athena’s governance (DAO).
Also 0.025% of all ATEN transfers will be paid to the holders.
Each milestone reward will be distributed in ATEN.
Q5:
BTS Labs Community: How do you see the project evolving in 6 to 24 months?
Côme(CTO of Athena Ins): The future in the 6 to 24 months will be to broadly cover the protocols already in place but also those which are emerging. Once established in DeFi insurance, we have the ambition to sign partnerships in traditional insurance.
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