Introducing FairSide

A True Model for Protection— The First of Its Kind

1.) Introduction

It feels great to say that.

FairSide is a Cover Protocol we think of as a “cover primitive” built on Ethereum but agnostic to the chains and projects we cover. We have designed FairSide to provide a new type of consumer protection against hacks, exploits, theft and the yet to been seen of the crypto industry.

So…What’s the TLDR?

• Blanket Coverage — cross-chain, cross-project, designed to follow you.
• This means you’re offered protection no matter what blockchain or project you participate in, pending the project meets some minimum requirements of the DAO.
• Coverage up to 100 ETH in value.
• Governed by a DAO, NOT a centralized “mutual”.
• Based on the concept of provably “fair” claims.
• All it requires is a low single fee of 4%.
• NO KYC. Basically, we’ve cooked up the next generation of Cover Protocols and believe it’s going to be a cornerstone for the evolution of our space. Soon within our industry you’ll see a shift in attention to traditional safeguards like established markets offer their participants — such as insurance and we aim to be at the very center of making those types of protections available. Customer protection is a trademark of a maturing industry and we believe crypto needs this before it can truly advance.

2.) Who Are “We”?

Our team is a collection of veterans from the insurance, blockchain, and software industries, who came together in order to create this next generation of Cover Protocols. Since starting our project, we have bootstrapped the costs internally and quietly raised in order to gather an impressive group of stakeholders and generate the pool of funds necessary to launch our platform, which utilizes staked Ethereum on a bonding curve to offer coverage. Instead of generating hype early and without a working product, we did the opposite — focused on building out our business model, team, and infrastructure to be sustainable and long lasting.

As individuals we have helped to start and scale successful companies in both the blockchain and insurance spaces, we combined the principles learned in both disciplines to create a novel model for our insurance alternative — currently unmatched by existing platforms.

To learn more about our team, you can refer to our website for additional information.

3.) What is the problem are we solving?

Currently, our industry is reeling from the domino effect that the collapse of a singular project can have on the space at large. Since 2020 and ending with the unwinding of Terra’s Luna/UST ecosystem there have been over $2,000,000,000.00 in crypto exploits. That’s a remarkable number when you think about the well known exploits and failures that have led to losses of funds for projects and users alike. What’s even more impressive is people continue to invest in the space, use DeFi applications, and fomo over NFTs — when there are no consumer protections in place, no safety nets.

In 2021, global crypto ownership rates reached an average of 3.9%, with over 300 million crypto users worldwide. This number is expected to grow exponentially as users gain more understanding of the technology and the assets become relatively stable. Obstacles to adoption are education and security. These pain points are amplified if we consider the further manifestation of DeFi protocols where users are required to comprehend complex concepts and trust protocols that are tested for the first time as well as current market volatility.

This is what we are going to solve, to offer the 300 million crypto users who would like to engage further in the blockchain space cover for their on-chain activity which may range from simply holding your crypto to swaps, bridging, trading and more. With no current competitors offering a similar model, we believe there is a blue ocean to make our lasting mark on the crypto space. Currently we are engaging with +20 of the top protocols to offer our services to their users, priming us to lock in the lion’s share of the current “insurance” market in crypto within a relatively short time-frame.

How this problem breaks down…

As cryptocurrency becomes more ubiquitous, the need for insurance is more necessary than ever. The problem currently is three fold:

1. The industry is still new, but learning. Previously, insurance was not an industry focus — that is set to change though, as users are ready to embrace a solution as long as the ease of use is high. No industry has ever reached its full potential without traditional insurance as it’s primer, this is the same for crypto.

2. Current offerings are slim and aren’t modeled with the principles of insurance in mind. They more so resemble a form of betting platforms. Users essentially gamble on whether a platform will be hacked, if so they lose their entire stake and if not they reap a high APY (but how high really and is that even worth the risk?). To add to the pain points, these products have not established their own consumer trust and have a low capital efficiency, leading to a lack of a community interest in providing the capital needed to run the protocols.

3. The coverage of said products is limited. Coverage that exists comes with high refusal rates and the need to hold multiple policies. Currently every user has to hold a separate insurance policy for each protocol and then multiple policies to cover multiple events in the same protocol.

What’s Next ?

Please keep an eye out for our following articles where we will dive deeper into the mechanism that make FairSide including:

• How it works
• The FairSide Model
• Staking and Memberships
• Augmented Bonding Curve
• Governance and Voting

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