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Bridge Mutual Closes Gap Between Traditional Finance and Digital Finance Insurance
One of the biggest problems standing in the way of widespread crypto adoption is lack of trust, particularly when it comes to assets on centralized exchanges or complex exploits on decentralized protocols. While it is true that cryptocurrency blockchains are difficult to tamper or manipulate, other services in the space still experience multiple large-scale hacks per month.
Centralized exchanges are prone to having their funds hacked, stolen, or lost. From the infamous Mt. Gox and FCoin hacks to the most recent KuCoin heist, dark clouds have been cast over the industry for centralized exchanges. These frequent incidents, in addition to the frantically volatile nature of crypto markets, have stopped cryptocurrency from gaining momentum.
That’s where Bridge Mutual comes in to offer insurance. It aims to give institutional crypto investors a reliable way to offset their investment risks by issuing discretionary insurance against exchange hacks, smart contract attacks, and stablecoin crashes.
How does Bridge Mutual work?
The funds used to insure Bridge Mutual’s policy holders come from stakers who are able to select the stablecoin, exchange, or smart contract that they want to insure. After funds are locked in, they enjoy passive income from investment yields and profit sharing in the system.
Likewise, the process for purchasing insurance through Bridge Mutual is just as simple as stakeholding. All users have to do is select the stablecoin, exchange, or smart contract they want insurance for. The protocol automatically calculates a premium based on the coverage requested by the user, and the user pays via their wallet. Once paid, the user becomes a policy holder and is able to easily make a claim on the Bridge website.
The Bridge Mutual API constantly scrapes and analyzes price feeds of stablecoins so that the claims process for stablecoin crashes can be settled automatically and instantly. Any smart contract or exchange claims are then processed through a nuanced, three-phase voting system. In a nutshell, this means that claims are voted on by the community and there are incentives and penalties in place to assure that every claim is adjudicated with high accuracy.
Two ways to earn rewards
Anyone who invests in the Bridge Mutual system can earn income in two different ways. One way is to contribute funds to the various insurance pools that Bridge Mutual offers. Once locked in, stakeholders will be entitled to earn profit-sharing rewards and yields. The other way to earn money is by voting on claims. Reliable and trustworthy voters can receive up to 5% of a claim’s premium by voting correctly.
What impact will Bridge Mutual have on the crypto industry?
As Bridge Mutual points out in its pitch deck, its closest parallel in the traditional financial world is the credit default swap. While it is true that unregulated credit default swap trading was one of the main factors behind the international economic crisis of 2007, most experts agree that credit default swaps generally play a positive role in the economy.
Since financial instruments of the type offered by Bridge Mutual can allocate crypto trading risks in a more optimal way, they can make the entire industry safer for institutional investors. If institutions were to become less reluctant to invest in crypto projects, the entire industry could benefit as a result.
Led by a crypto lawyer, a blockchain developer, a former SEC attorney and an executive from Paxful
Bridge Mutual CEO and co-founder Michael Miglio is a partner at the crypto law firm Wolfe Miglio. Lili Feng, CLO at Bridge Mutual, is an experienced commercial attorney that worked at several different investment banks and was a Project Attorney at the U.S. Securities and Exchange Commission. Bridge Mutual’s CTO is Ian Arden, an expert that brings 20+ years of experience in Solidity, C, C++, C#, LAMP stack, JavaScript and Java to the table. Joshua Viser, Director of Institutional Accounts at the peer-to-peer Bitcoin marketplace Paxful, rounds out the executive team with connections to institutional players in the space.
Ethereum price has been hovering around its highest level in 7 months for the past few days amid a boost in the crypto market. ETH has jumped more than 49% in its year-to-date price, increasing 5% in the past week. Ethereum’s total market cap has slipped by more than 3% over the last day, while the total volume of the altcoin traded increased by more than 6%.
Fundamentals
Just like most cryptocurrencies, Ethereum price found support in the recent fiasco in the banking sector. The recent vulnerability in the banking sector pumped liquidity in the global crypto market as investors shifted to other assets such as cryptocurrencies. Bitcoin, the largest cryptocurrency by market cap, saw its price hit its highest level in 9 months, while Ethereum jumped to a 7-month high.
The global crypto market was in the red later on Wednesday as investors chewed on the Fed’s latest interest rate decision. The Federal Open Market Committee (FOMC) announced on Wednesday a 25-basis point hike in the federal funds to 5%, down from 4.75%.
According to a statement by the US Federal Reserve, the FOMC remains highly attentive to inflation risks as it seeks to achieve an inflation rate of 2%in the long run. The Committee also announced that it anticipates additional policy firming to help in attaining a stance of monetary policy to aid in achieving the 2% target.
According to the Fed’s…
Bitcoin price has been hovering above its highest level since June 2022 over the past few hours. The largest cryptocurrency by market cap has jumped by 28.30% in the past week, while its year-to-date price inches higher to 70.63%. Bitcoin’s total market cap has increased by 4.77% over the last 24 hours to $547.7 billion, while the total volume of the coin traded rose by 50%.
BTC Skyrockets
Bitcoin price was rallying on Monday as most altcoins slumped, led by the largest altcoin by market cap, Ethereum. The global crypto market cap has increased 2.49% over the last day to $1.18 trillion, while the total crypto market volume jumped 34.88%. Bitcoin’s dominance inched 0.98% over the past 24 hours to 46.34%, its highest level since June 2022.
The recent global banking crisis in which three major banks in the US were closed within days has pushed the BTC price higher. Silvergate Capital, Signature Bank, and Silicon Valley Bank recently disclosed operational difficulties, prompting regulators to shut them down.
Switzerland’s largest banking institution, UBS, announced on Sunday that it had entered a merger deal with its embattled rival Credit Suisse. UBS announced that it would buy its rival for $3.25 billion, with Swiss regulators playing a key role in the ideal. According to the Swiss National Bank, the merger will secure financial stability and protect the Swiss economy.
Bitcoin reacted positively to the news, cruising…
Solana price joined in on the recent rally in the global cryptocurrency market, jumping nearly 17% in the past week. Solana has made substantial gains this year, climbing 102% in its year-to-date price. SOL ranks as the 11th largest cryptocurrency after Binance USD and ahead of Polkadot. Despite the altcoin’s recent rally, the total volume of the coin traded has continued to dwindle.
Fundamentals
Solana price was trading slightly higher on Friday as Bitcoin and other altcoins extended their rally despite the bank contagion fears weighing on the markets. Bitcoin and Ethereum have been leading the recent rally in the market, jumping more than 30% and 20% in the past week, respectively.
Investors have welcomed the resilient crypto prices amid the recent crisis in the banking sector this week. The week started with the collapse of Signature Bank and Silicon Valley Bank on Sunday until the focus shifted to Credit Suisse and First Republic Bank. Traders have been digesting the fate of Credit Suisse even after the bank said that it would borrow up to 50 billion Swiss Francs from the Swiss National Bank.
Several analysts have linked the recent rally in the crypto market to lingering bank worries. Even so, crypto prices are heavily influenced by inflation and the Federal Reserve interest rate hikes. According to analysts, the recent decline in banking stocks points to the vulnerability of traditional institutions, raising liquidity concerns…
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