What is Bridge Mutual?
Bridge Mutual are developing a decentralised insurance platform facilitating the provision of coverage for stablecoins, centralised exchanges and smart contracts. It is being built on Ethereum but will be migrated onto Polkadot. The platform will allow users to provide insurance coverage, decide on insurance pay-outs as well as get compensated for partaking in the ecosystem.
Claims for stablecoins will be automatically and immediately settled by way of a pre-requisite set of conditions that have to be met to make a claim. However, claims for smart contracts and exchanges will be adjudicated through a multi-phase voting system.
Note that the native token is not used to purchase cover, rather stablecoins are used to prevent liquidity issues in Bridge Mutual as a result of paying out large claims at a time when the value of the token falls significantly. I think the value of this is understated as it may be unattractive to hold your payout in the native token as prices will likely fluctuate quite a bit in the infancy of the platform. When users buy insurance, the premium is distributed in the following manner:
- 70% is burned;
- 20% is given to stakers; and
- 10% is locked to pay voters in the event of a claim.
The multi-phase voting system is initiated by the submission of a claim by the policy holder. A simple majority is required in each phase to bring a result. The first phase comprises a vote among the policy holders of the same asset. If the claim is declined in this phase the claim is abandoned. The second phase comprises a vote among the stakers. This will result in a preliminary decision for the claim.
Should the claimant wish to appeal the rejection, or should at least 25% of the stakers wish to appeal the approval, the final decision will be made a select group of Trusted Stakers. This enables those that vote accurately to receive a greater voting power.
The decentralised nature of Bridge Mutual rely on interactions within the blockchain to enable governance and claims voting to take place. For this reason, the platform is using the Polkadot blockchain as opposed to Ethereum.
Who is in Bridge Mutual's team?
Michael Miglio is the co-founder and CEO of Bridge Mutual. He has got over five years of experience working in law firms. As well as his role at Bridge Mutual, he is also the managing partner of Wolfe Miglio, a crypto-exclusive law firm. The law firm is reportedly being one of the only cryptocurrency specialised law firms in the United States. Their previous clients include QTUM, Syntropy, Vid and Bexam among many others.
Ian Arden is the CTO at Bridge Mutual. He has been in the cryptocurrency space for over three years. He is the co-founder of Applicature, a blockchain development agency working on the development of smart contracts, deployment and technical consultancy on token offerings. He is also the head of blockchain security at Zokyo where his team has audited over a dozen DeFi projects.
Lili Feng is the CLO of Bridge Mutual and is also a partner at Wolfe Miglio. Prior to entering the cryptocurrency space, she represented many foreign companies entering the U.S. market as well as American companies doing business in Asia, through cross-border MandA, Joint Ventures and Strategic Alliances. Lili has also spent time at the US SEC working with more than twenty public companies and financial institutions. She specialises in advising on Security Token Offerings.
What is BMI required for?
The Bridge Mutual token (“BMI”) has four fundamental uses. These are:
- BMI holders can lock and stake their BMI in coverage pools for specific assets in exchange for profit sharing and yields;
- BMI is used to assess claims that are logged on the platform. Users benefit from actively participating in assessing claims as they will earn tokens by doing so. Bridge Mutual’s FAQ notes that the deterrent from fraudulent voting results from having a portion of the voter’s stake burned proportionate to the disparity between the percentage of approvers and rejecters. This seems to be an effective deterrent but it also seems like it could result in a number of abstainers as it creates an inherent risk in making a judgement without absolute certainty; and
- As Bridge Mutual is a decentralised platform, ownership of the token allows participators to contribute to its governance.
As the platform is still extremely new, the token utility may not have been completely defined yet as the technical whitepaper is still being prepared.
Who are Bridge Mutual working with to develop the platform?
- Zokyo: Industry-leading security evaluations, code auditing and bolstering protection to protect Bridge Mutual against potential threats. Zokyo is trusted by leading blockchain projects and Fortune 500 companies alike as a security and development company;
- Bondly Finance: Assist with the issuance and technical design of complex NFTs and enable holders of Bridge Mutual NFTs to securely sell and resell the NFTs through Bondly (I do not yet understand what the value of this could be, sounds a little gimmicky like when you receive a gift if you buy insurance with a certain party);
- Plasma Finance: Symbiotic partnership which will enable Plasma Finance users to provide liquidity to Bridge Mutual using the Plasma Finance platform and Bridge ecosystem. In return, Bridge Mutual has pledged to provide an additional layer of security to the Plasma Pay ecosystem;
- PAID Network: Enable PAID Network’s users to benefit from Bridge Mutual’s discretionary insurance directly. It will also allow their users to interact with Bridge Mutual insurance product offerings straight from the PAID platform; and
- AllianceBlock: Integrate Bridge Mutual into its P2P lending platform, allowing Bridge Mutual to provide coverage to lenders and investors.
Vysyn Ventures has also invested in Bridge Mutual and believe that the lack of requirement for KYC will support it's ability to become the leading platform in the space. Vysn Ventures have also invested in Neo, Zilliqa and Icon among others which shows their expertise in finding strong technologies to invest in.
Where can you buy BMI?
It is still very early days for Bridge Mutual and to date there have been three rounds of private sales and an IDO listing on Uniswap. There has also been a Polkastarter campaign confirmed by the CEO. This means that the current price of BMI will likely fluctuate as it gains exposure to new markets where new investors will buy in but also old holders sell at a higher price that normally follows a listing.
Almost the entirety of all BMI in circulation is sold on Uniswap (BMI/WETH). It is currently priced at £2.45 per token with a fully diluted market cap of £392,710,791. This is very high for a startup as the fully diluted market cap would put it firmly in the Top 100 coins. The whitepaper may have more details on how the tokens will be released.
What does Bridge Mutual have in plan for the future?
Bridge Mutual are currently completing the development in preparation for their Mainnet 1.0 launch. The date of the release will be directly influenced by the completion date of their audit but the CEO has noted that there is currently a significant backlog at the top-tier auditing firms.
They are looking at having a liquidity mining event in February. It is claimed to offer rare utility NFTs. Shortly after the liquidity mining event closes, the project will launch (assuming all audits are in place).
The developers have created a conservative forecast with $100m in coverage by the end of 2Q21.
The key aim for the developers is to complete the transition into a DAO. For an effective DAO to run, a significant number of users are required. The team is currently making decisions on before of the platform until the platform is healthy enough for a transition to be completed.
Conclusions
Bridge Mutual will be another new player in the market. There are a number of comparisons that could be made with PolkaCover, of which both see 2021 as the year in which they will become functional, recognised and on their journey to becoming the market leader in the insurance space. A successful migration to Polkadot will be important for Bridge Mutual in looking to compete in the event that Ethereum 2.0 suffers from delays or fails to deliver its promises.
In my opinion, it feels like PolkaCover currently have the edge on Bridge Mutual due to the comprehensive offerings it intends to provide its customers. However, the number of avenues Bridge Mutual have currently explored including the integrations with a number of partners will allow Bridge Mutual's offering to have a substantial reach, potentially one that will enable it to go down the road of finding greater partnerships with technologies as opposed to focusing on gaining individual customers looking for coverage. Bridge Mutual also have a team that fundamentally has significantly stronger relationships within the cryptocurrency space and their relationship with Wolfe Miglio could help expand their user base exponentially.
Bridge Mutual seems like an investment that few would regret in the long term. I definitely value their objectives far greater than what Nexus Mutual or Etherisc have currently shown the market and think that over time they will contribute greatly to the cryptocurrency ecosystem.
There is always a concern that the fully diluted market cap already at such a high value may place growth constraints on the BMI token but considering the value placed on effective insurance, there is definitely significant room for Bridge Mutual to grow. This could also be a very early concern that will be waved away by the team, by way of token burning to reduce the maximum supply or significant vesting/lock-up periods. This would be increasingly important when we find out the details surrounding token distribution and the amount of tokens held by the team and how they could be released.
Do you think Bridge Mutual could take over the position of the incumbent insurance platforms? Do you think this incredibly strong team have proposed a strong product that could compete with new platforms?
