Mining
Stake to Earn rewards
Participants who stake tokens such as ETH, DAI, USDT and other eligible tokens into the platform will gain \$INSUR tokens as incentives. This process, which is also known as mining, has been adopted by many other DeFi projects such as Curve, YFI, Sushi Swap and more.
As InsurAce.io offers both Insurance and Investment services, allowing customers to stake capital on both sides, the INSUR tokens will be mined together according to the following equation.
$Speed(Investment)+Speed(Insurance)=C$
where C is a constant determined by the token economy adjusted over time.
This equation will ensure that a delicate balance is maintained between the Insurance and Investment functions. When the insurance capital pool faces insufficiency, thereby posing higher risks and raising the premium, the mining speed on the Insurance side can be increased to attract more capital to the insurance pool. Similarly, once the capital pool on the Insurance side is sufficient, the mining speed on the Investment side can be increased to attract more investment funds. This balance is driven by the SCR mining mechanism at a lower level.
SCR mining is used to dynamically adjust the mining speed among the insurance capital pools according to the capital sufficiency status represented by the SCR ratio, incentivizing more capital staking to the less staked pools represented by the SCR ratio. This will help to reduce the premium on those new or high-risk protocols as a whole. The mining speed will return to normal when the SCR ratio is equal to or above the platform-defined SCR ratio.
Specifically, assume
$S_i$
is the number of tokens staked in an insurance capital pool at time
$t$
,
$S_\mathrm{max}$
is the number of tokens staked in the largest pool at
$\mathit{t-1}$
whose mining speed is
$\mathit{Speed}_\mathrm{min}$
, then the mining speed for pool
$i$
will be calculated by,
$Speed_i = \begin{cases} Speed_\mathit{min} &\text{if } S_i\ge S\mathit{max} \\ Speed_\mathit{min} \times \lambda(1-S_i/S_\mathit{max}) &\text{if } S_i
where λ is the speed scale, e.g if λ = 2, the maximum mining speed will increase by 200% from standard speed.