Should the pNetwork DAO contribute up to $80k to fund an insurance coverage for the pNetwork?

Proposal: Should the pNetwork DAO contribute up to $80k to fund an insurance coverage for the pNetwork?

This DAO Proposal is open both on Ethereum (via Aragon and Eidoo) and on BSC (via Snapshot).

Summary: The pNetwork is looking for solutions to provide insurance coverage to protect the value locked within its ecosystem. Given that the price of coverage typically oscillates between 3% and 5% of the total pool amount per year, we propose to allocate up to $ 80k for an initial protection of approximately $2 Million for 1 year.

Motivation: Bridges are complex systems. Several on-chain contracts on different chains are continuously interacting with off-chain components, posing security at the top of every team’s priority list. Of course, the core team is long-term committed to the security of the pNetwork. Among the most innovative primitives available in defi, decentralised insurance has emerged as a novel way to get an automatic payout in case of an adverse event.
Should this proposal be approved, in an effort to further increase the safety of the system, an insurance product of this kind could be launched within a few weeks as a protection mechanism for the pNetwork.

Specification: The most common defi insurance protocols are decentralized discretionary mutuals. By relying on reserve providers, aka the capital pool depositors, these kinds of providers are able to offer over-leveraged protection to a set of carefully vetted protocols.
This proposal brings forward the option to allocate up to $ 80k that would enable, if used in full, the bootstrapping of an initial protection of approximately $2 Million for 1 year over all pTokenised assets within pNetwork.
Such an amount may be increased in the future to allow for a larger protection - should additional funding be required, a new DAO proposal would be opened.
A treasury contribution for this type of product would contribute to making the system more secure and would also have an impact on the general perception of the pNetwork.

:ballot_box:Vote on Ethereum via Aragon or Eidoo: Aragon

:ballot_box:Vote on BSC via Snapshot: Snapshot

Pnetwork can provide 3rd party insurance, like suppose I trust pnetwork and I know all the technical details, then I will bet on insurance of pnetwork. Suppose I have 100$ worth of btc, I will lock my btc in pnetwork insurance, for that pnetwork pays premium of 2% or some x amount per month. If any uncertainty I will loose value in my 100$ bet, but if network is secured and running stable I will get a premium every month and it’s an easy money. It will increase security and also thousands of pnetwork users give assurance to ptokens indirectly.

that’s an interesting point! It seems you are suggesting pNetwork should implement its own insurance platform for its ecosystem instead of using an external project. While that is possible, this would mean adding a new vertical to the range of DeFi solutions the protocol currently supports/offers hence dedicating a significant amount of resources (meaning: there are entire projects dedicated exclusively on this, while in our case it would be just one element within pNetwork) towards this goal. It would be really interesting to understand why you think this would be a better approach?