Recapitulation of STEADYSTATE PROJECT AMA event held at AMA LOVERS CLUB.
Date: Thursday, 17th June, 2021
Time: 14:00 UTC
The STEADYSTATE PROJECT team was represented by @Nickscavuzzo and @Brianmccabe who judiciously shared with us detailed knowledge and information about STEADYSTATE PROJECT.
1st Segment: INTRODUCTION
Q1: Can you please introduce yourself and your background, also introduce the team working on SteadyState Protocol?
ANS: Sure thing...
So my name is Brian McCabe, I joined https;//www.steadystate.finance as Chief Growth officer last month but before that I,ve been working with CeFi exchanges especially in the peer to peer space for over 5 years, I recently just omved from one of the largest p2p crypto exchanges where I was lead for product marketing, fortunately or unfortunately most the innovation has now into the DeFi space.
I've been in and out of the crypto scene since 2010 or so, walked away from it a few times in disgust a few times too (Mt Gox for example) but what I have learned over the years is this whole space is super resilient and anti fragile, An equal amount of scepticism and admiration for the crypto space is what keeps me here now and for such a mindset the Insurance industry suits me perfectly.
At Steady State we have a great founder team, @jonathanLibby our CEO and Akash COO bring a lot of founder experience with them and they are currently closing our private funding round and making some great partnerships in the space, We are all super motivated!.
Q2: Can you introduce SteadyState Protocol, what critical problems does it solve that existing solutions are not solving and what's the competitive advantage?
ANS: In a nutshell Steady State aims to simplify and strengthen cryptocurrency platforms, protocols and their markets by providing comprehensive insurance coverage through automated smart contracts risk analysis that removes bias, increases efficiency and ensures immutable claims processing.
A mouthful yes..
Let me break it down
Since I have a background in peer to peer crypto marketplaces I often like to think of us a peer to peer market for insurance like nexus or cover where I can sell the risk of holding XYZ token on an insurance marketplace and someone else can buy that risk and earn a premium if nothing bad happens...very simple
Now we want to change that model completely and encourage the PROTOCOLS to insure themselves
Why? Well Firstly we don't see it as user friendly,
I don't insure the dollars in my pocket and I know if I put them in the bank they are required to have coverage called FDIC, which in fact stands for “Federal Deposit Insurance Corporation”
and what do they do...They insure your funds in the bank as many are aware
The problem up until now is there just isn't enough data on the DeFi ecosystem to accurately access and quantify risk and that is our risq database where we are building an open source repository of all hacks, all audits, bug bounties etc, essentially any datapoint we can find on a protocol to access their risk profile.
So i'm going on a bit long here but what immediately drew me to this project is the potential,
We are essentially aiming to come in and act like aFitch or S&P Global Ratings of crypto…
Protocols, if they have top tier auditing and security they can get their whole protocol insured by us,
likewise protocols that have a terrible track record wont be able to get cover from us.
Because we extend coverage to whole protocols there is an incentive for them to comply with best practice….Long term we am to make the standards
Protocols can also use their reserves to put into steady state colateralor pools then are essentially underwriting their own protocol, Protocols who partner with us can also encourage users to stake their native tokens to underwrite the protocol and earn premiums from steady state
its a complicated topic but once you get it, you cant unsee it!! 😊
happy to explain more in DM if people want to.
Q3: Can you briefly describe the top milestones you have achieved and your target milestones with timelines, also share your roadmap?
ANS: Sure thing, firstly you can find our litepaper here.
Up until this point we have been mainly building out strategic partnerships in the crypto space, I have to keep tight-lipped on some of them but we have got great support from major players and can't wait to announce our IDO details once we finalize our partners.
We have already secured a partnership with Yield.app (https://t.me/yieldapp) and they will be our first client, Essentially they were looking for an insurance product to protect the various risks they carry by being involved and actively investing in the DeFi Market
CeFi platforms, such as YIELD App, can use the protocol for asset coverage, pay the premium, and offer their users insurance packages if they choose to. Steady State is not limited to DeFi protocols, although they will likely be the most common. CeFi projects, however, can greatly benefit by safely insuring crypto assets through Steady State.
For example, YIELD App uses DeFi protocols to generate interest for its users. If one of these protocols were hacked or exploited, leading to loss of AUM, they would be covered.
So we are not just a defi project also!
BUT ONTO our roadmap
Following IDO we will focus on use cases of our native token.
The token enables the user to participate in governance, and voting rights to help steer the direction of Steady State. Governance has a wide range of responsibilities within the Steady State ecosystem, including management of treasury funds, deciding what new coverage pools to open, and possibly as the currency for SteadySwap, our secondary exchange that allows users to trade their risk positions. Anyone who knows insurance knows a well functioning secondary market is one of the most important components as it allows participants to easily balance their risk positions.
The other big thing is Building out our risk database, right now insurance providers use most a market making model for risk which is very basic, we actually aim to model risk
instead of PRICING risk as nexus and other DeFi insurance providers do
By implementing open source database technology that documents and collects information on prior exploites while determining parameters and likelyhoods for all types of malicious attacks, bugs and black swan events.
Machine learning modeling will be applied to the data store which will derive an accurate measure for the risk of loss.
Actuarial mathematics will translate that risk model to assign a specific, recommended premium a protocol should pay in order to be insured.
its all complicated stuff but im happy to say our biggest problem is just getting enough data ingested right now and knowing what are the things to look for.
Q4: Can you briefly describe your PARTNERSHIPS so far?
ANS: Not just yet although we have booked a great agency to make a explainer and concept video as we are aware what we are offering is very revolutionary and new in the space
but I can recommennd anyone who wants to hear it exampled in ELI5 fashion to listen to our CEO Jon explain it here.
We will have a five part explainer series coming uut on our medium too, I believe part one went out yesterday
I dont want to harp on about Yield but they essentially are our proof of concept customer and will assist in setting a foundation for a sound and sustainable business model.
A number of other blue chip partnerships have been locked in but unforunatly we cant announce them yet. They promise to BE huge and propel us to be something that interacts with nearly every protocol in the space
announcements will come very soon, I just encourage anyone who wants to hear first to come over to our telegram channnel https://t.me/SteadyStateProtocol
Q5: Finally, Can you give an overview of your Tokenomics, and the UTILITY of the $RISQ Token?
ANS: sure, $RISQ is Steady State’s multi-purpose utility and governance token that will be distributed to users through various liquidity mining incentives.
The token allows users to vote on which protocols may create coverage pools, evaluate risk analysis, provide coverage, and vote on other governance functions.
In the rare case when the smart contracts cannot detect the specific parameters for a claim, $RISQ holders can vote to decide the result.
The $RISQ token is not necessarily an instrument for speculation but more a long term say in the protocol and DAO
Protocols and users holding $RISQ tokens can also vote on proposals to improve or make changes to the protocol. Steady State embraces decentralized governance so that everyone can take action in determining the direction of the protocol.
Essentially token holders will have a say in how the protocol evolves.
In short Holders of RISQ will be exposed to a range of utilities.
Holders will be able to purchase insurance policies, vote on the direction of the steady state protocol, and decide outcomes of claims that fall through the automated claims system.
2nd Segment: LIVE Questions
Q1: I learnt from your whitepaper that governance within the Steady State network entitles DAO members to submit proposals that favour the growth of the network. However, proposal spam is becoming a big spoiler in governance of various DeFi protocols. In view of this, what plans/processes will Steady State put in place to restrict proposal spams by bad actors within the DAO?
ANS: very good question and not one there is an easy answer for but I would say this...
Steady-state truly aims to represent both sides of the insurance industry, protocols and token holders,
In current offerings, nxm in particular the decisions are often made by people with a vested interest to not pay out for certain events and this leads to maybe bad governance
when it comes to the steady state dao, I believe the broad range of interests and the end goal to move form opinion based insurance payouts to Rule-based will keep us out of the weeks on governance issues
but great question and something im going to keep in mind.
Q2: Steady State is FOCUSED on the protection of DeFi and the cryptocurrency ecosystem by building an automated smart contract based insurance system to against systemic risks and at the same time reward users with $RISQ. How does Steady insurance system work ? how does it reward users ? Are there incentives for bringing other people to join steady state insurance ?
ANS: There are plans for incentives to users staking their funds to protect a specific protocol. Checkout out coverage map on www.steadystate.finance to see the graphic image to see the insurance system mapped out. Communities will essentially be protecting themselves and their protocol/ecosystem. We provide extra layers that you will see in the graphic.
Q3: There are 3 characteristics that are fundamental within an insurance project among those factors are the simplicity of the process, the security of the platform and the accessibility or low costs for acquiring policies, therefore I would like to know more about these characteristics before mentioned and how Has the Steady State project developed and optimized its work processes?
ANS: 1. It will be simple, rules based insurance based on smart contracts to verify and process claims or if an event happened. where a claim is not automatic its the aim of the DAO to make it automatic
2. security. Long term we aim to be a "mark of security" the same way you trust a fintech app that bit more when you see they have their deposits insured. We aim to be this "brand" that peopel say "ok i can put some money in this protocol without doing 10 pages of whitepaper as we know they must have certain standsards that we offer their protocol level cover"
so naturally that means security is at the core of our operation and we will hold ourselves to the highest standards of security, growth from the pool is also intended to cover all the costs required to run Steady State admin, investment, technology, cyber security, etc. The money in the treasury pool will be staked and given to investment teams within the community security is an ongoing investment for us
Accessibility.... Well this is out key selling point and i believe I covered most of it across earlier points but the main thing is by having best in market risk modeling we can accuratly access risk
also our aim is not to profit from selling insurance, our aim is to grow as a protocol and we will fo that by providing best in market rates that is possible thanks to knowing the risk and the fact our mission is to provide as much coverage as possible not make profits.
Q4: Apart from the $350 million that has been lost in exploits and invulnerabilities, the DeFi insurance also faces crippling scalability issues due to insufficient liquidity and inconsistent risk analysis tools, leaving Protocols and individuals vulnerable to limited converage and unprecedented THREATS.
How does Steady State Protocol solve this current problem with DeFi Insurance?
ANS: Ok so yea the first thing we want to address is the risk analysis tools, we will build the open-source risk database as I mentioned.
However black swan events are by their nature unforeseen and while we will provide this cover claims will follow a process of investigation too.
In such a case where we have not solved for this event before the assets within the insured pool will be frozen. This will allow for evaluation of the claim which will in-turn work to prevent payouts of fraudulent claims.
This fraud control should prevent protocols from making fraudulent claims.
The conditions of the smart contract should dictate the processing and validation of a claim, however there may be occasion when a protocol is required to provide more evidence.
This will typically involve a protocol being asked to demonstrate the actions they took to prevent the exploit and the measures they implemented to manage and mitigate it. The protocol governance team will manage the claim should it reach this stage and if the protocol satisfies their inquiries the funds will be released from the staked pool.
Q5: Decentralized insurances face a problem and that is that to insure their users, they must have personal data, therefore I would like to know what mechanisms they have to protect said data and if within the policy acquisition process they will have to perform some kind of process KYC? The platform will have some type of insurance policy in which you do not have to deliver a lot of personal data and you can enjoy some type of anonymity?
ANS: some like cover require KYC
but then there is also providers who are reselling covers products to people without KYC
As a protocol, we insure events that happen based on rules and criteria so users won't need KYC
Naturally when partnering with protocols we get to know them a bit more )
Q6: In my opinion, an open team structure is the key to trust, but I don't see the CEO and Steady State team structure on the website or in the litepaper. Will you show your team one day? Because it will increase the confidence of investors.
ANS: Hi, we are updating our website as we speak but I have mentioned the profile of our CEO and COO in my first message,
you can also connect with CGO me on linkedin if anyone wants to propose early partnerships https://www.linkedin.com/in/mccabebrian/
Q7: ✴️ The most important factor hindering the mainstream adoption of cryptocurrencies is the belief that it is high risk. Adoption will increase as insurance systems minimize this risk perception.
As Steady State, what is your future projection across DeFi and Crypto and what is your goal in the crypto insurance industry? Do you have the dynamics that will enable you to be a leader and locomotive in the field you target?
ANS: Our aim is to shore up trust in the entire ecosystem so it allows new players in,
but our aim is to be a slow player who will stabilize the whole DeFi ecosystem, Instead of individuals actors going out and seeking to insure their own perceived risk we will be modeling whole protocols and ecosystems and creating a reward-based mechanism for market participants to come in and price and eventually underwrite this risk.
as i said earlier, long term make the standards , encourage others to adopt them, reward them for doing so and offer best in market prices as we have the best data.
sounds like a lot but it comes together in perfect sync.
Q8: Steady State basically wants to protect project from the high risk of Decentralized Finance, but as you know always appear bad actors that only want to take advantage of that, so can you tell us what are the requirements to be ensured by you?
ANS: Our focus is on protecting the top 100 defi index and moving from there. The goal is ensure good capital markets and improve capital inflow to good protocols. When an automated smart contract approves a claim, it is put into a 10-15 day lockup for human evaluation and they can challenge if the believe the protocol is being dishonest. Credibility to your community is everything in this space and if you're not being credible to your community, then you won't survive. We want people to be able to challenge an evaluate bad protocols, and the protocols that are in our system, we want them to have more to lose then gain by commiting bad actor activity.
Q9: If Steady State's modeling approach mirrors the methods that are prevalent in traditional insurance markets, why was it not executed in this market, what did you look to from blockchain technology to base your project on DeFi, what does this bring to the project?
ANS: I don't understand? The Steady State model is a mixture of many approaches made in traditional finance combined to make this system. Traditional insurance needs disruption, and we haven't seen that disruption needed to push it to a better financial environment for all people. We hope this can push it that direction.
Stay Safe and encourage any protocols you part of or supprot to consider covering their risks.
In the end, a safe platform or protocol is one that people want to be a part of and I'm personally so happy to be part of something that will make the whole industry more steady and stable!!
Welcome aboard all!
Follow Us On Our Various Social Media Communities For More Update;
And especially youtube as we have a lot of concepts to explain and a lot of explainer videos coming soon
Also, follow our CEO on twitter @jonlovesfinance as he always has a hot take on DeFi insurance goings-on too.
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