Diving into the dynamic fusion of insurance and NFTs, our recent chat with Day By Day (DBD) was a real eye-opener. From the spark that ignited DBD's journey to real-life scenarios of NFT-powered insurance, challenges faced, and future predictions—the AMA was a treasure trove of insights. So, let's unravel the gems dropped by the DBD team in this recap, giving you a taste of the innovative chatter that went down.
DigiFinex: How did the idea for Day By Day and its integration of NFTs into insurance brokerage come about?
DBD: In 2018, during our tenure in the IT business, we encountered a significant insurance event—a flood resulting from a burst pipe in our workplace. The subsequent claims process proved excessively lengthy, painful, and failed to adequately compensate for the damages incurred. Frustrated, we changed insurance providers after this incident.
To compound matters, three months later, another pipe burst in a different area of our office, posing not only a threat to our space but also endangering tenants on lower floors due to collapsing ceilings. This series of events prompted us to question the traditional insurance model.
Facing skepticism from insurers on the second occasion, we realized there had to be a better way. Our dedicated team, led by Daniel and others, brainstormed on a whiteboard to revolutionize the insurance industry using blockchain, incorporating smart contracts, NFTs, and DeFi.
Our goal became clear: democratize, decentralize, and create a fairer insurance process. We aimed not only to provide protection for those already covered by insurance but also to extend coverage to the uninsured—a segment often overlooked.
While acknowledging the evolving nature of this space, we embarked on a three-and-a-half-year journey, carefully architecting and developing a solution. Today, we are excited to share our progress and discuss the upcoming release of the final product. Stay tuned for further updates as we continue to shape the future of insurance on DigiFinex.
DigiFinex: Can you provide an example of a real-world insurance scenario where NFTs make a significant difference in the process or outcome?
DBD: A standout feature of our approach is providing genuinely personalized insurance—tailored to fit your needs and preferences. We don't impose a one-size-fits-all solution; instead, we empower you to choose coverage that matters to you. This is where NFTs play a crucial role.
NFTs come with diverse attributes, covering a range of items, from electronics to art and furniture. Consider a real-world scenario: you're heading to a camping site, realizing your pricey camera is tagging along. Naturally, you want it insured against theft or damage. Instead of running around to find a broker, picture this: you're in your car, deciding to secure insurance right from your phone—a quick process that takes just a few minutes.
This flexibility enables us to provide a highly personalized service. When it comes to making a claim, we prioritize efficiency. With the potential assistance of AI and blockchain technology, we aim to process claims within minutes. Imagine having your asset's presence verified or proving ownership swiftly. It's about more than just replacing a password; we leverage technology to redefine insurance, making it efficient, tailored, and accessible.
DigiFinex: What are the key challenges that Day By Day aims to address within the insurance industry, and how do NFTs play a role in overcoming these challenges?
DBD: Let's dive into our mission of democratizing. Why is it that big players like Warren Buffett and the Lords of London get to participate in underwriting, while individuals with smaller amounts, say $1,000 or even $100, can't join in and earn returns on their investments?
On our platform, we've likened underwriting to crowdfunding. Participants receive an NFT representing their percentage holding in the pool. This money is then utilized for underwriting in support of individuals seeking insurance. Contributors enjoy the benefits, with 50% of the premium distributed among those who provided the underwriting. Now, let's talk about decentralizing. Why can't everyone own a policy and potentially generate income? Why limit brokers to phone-answerers or confine actuaries to traditional processing that might rule out certain types of insurance?
We're breaking those barriers. Enter the NFT, a unique ownership token like "jewelry, 30 days for theft only." Once owned, this NFT grants its owner a percentage of the premium whenever someone insures jewelry for theft or anything within the specified terms. Our aim is to democratize the insurance industry, making it fairer in terms of claiming, proving ownership, and speeding up the entire process.
The days of waiting four months for a claim or being interviewed like a criminal after a break-in are over, in our opinion. We believe technology can expedite and streamline these processes, and that's precisely what we've built.
DigiFinex: So what is the process of verifying these incidents? How do you really actually verify the incident and then the evaluation of the claimable amount?
DBD: The valuation process kicks in when you register your assets using our app. Feel free to download the app, register your valuables, and earn rewards in the form of DBD tokens for doing so. Once your assets are registered, their value is documented on the app, inclusive of receipts and other essential ownership proof gathered during the registration.
After this, you can choose insurance for specific assets based on your preferences. Whether it's a 30-day coverage for one item or a year-long protection for another, the flexibility is in your hands. When it comes time to make a claim, a straightforward set of questions awaits you, backed by some AI magic to validate the process efficiently.
DigiFinex: Are there any specific insurance sectors or types of policies where Day By Day's NFT-powered model is particularly well-suited?
DBD: Our possibilities are boundless. When we say "day by day," we're not just talking about a catchy name—it encapsulates the concept of your assets evolving over time. Whether it's kilometer by kilometer, health insurance, or even traditional life insurance, we're exploring it all.
The straightforward nature of life insurance, as one traditional company pointed out, is just binary—alive or not. And yes, that's something we can handle. Looking ahead, the roadmap includes a potential arm wrestle between Daniel and me to decide on the next venture—perhaps diving into Defi insurance, smart contracts, and pools.
There are no real limitations; it's all about imagination and time. Imagine wearable technology streaming live data, tracking weight loss, improved sugar levels, outstanding ESG and ECG metrics. Your reward? A reduced premium for the next quarter. Conversely, someone less active, gaining weight, and facing elevated sugar levels might see their premium increase. The possibilities are vast, and we're excited to explore them all.
DigiFinex: How do you envision the future of insurance with NFTs? What trends or developments can we expect in the next few years?
DBD: It's not just about securing your assets; it's about unlocking new possibilities. You can step into the role of a broker or even an underwriter. Looking ahead, our ultimate goal is to bring peer-to-peer insurance into the mix. Picture a seamless system where our pool and underwriting mechanisms work harmoniously, allowing individuals to share and own NFTs as policies.
In this future landscape, anyone could create their own pool to provide insurance to someone else—a dynamic marketplace for peer-to-peer insurance, much like the efficiency of Uber. Reviews, payments, and reputations would be built on-chain, creating a trustworthy environment.
In the next six months, we're planning to roll out a social reputation system. This system would assess risk management based on someone's Uber score, Airbnb score, and even their Facebook profile. By tying all these elements together, we aim to offer personalized pricing that reflects an individual's risk profile accurately. When all these elements come together, the peer-to-peer step becomes not just feasible but incredibly efficient.
DigiFinex: How does DeFi fit into DBD’s roadmap?
DBD: Currently, DeFi is primarily in the realm of underwriting for us. Think of underwriting as a DeFi pool, akin to a staking pool where contributors use USDC and receive returns based on the pool's performance. As more people secure insurance, returns increase. This not only raises the value of the LP token but also rewards underwriters each time someone obtains insurance through the wallet, creating a passive income stream.
Soon, we'll introduce NFT staking as another DeFi offering, along with staking options for the native token on Algorand and Polygon. Presently, you can stake your DVD tokens, earning discounts on NFTs. Planning to buy an NFT and possibly become a future insurance broker? You can score a discount by paying partially with DVD tokens and burning them.
In essence, we have underwriting and staking—two pivotal components of our DeFi framework. While there might be more to come in the future, these offerings are already making a significant impact.
DigiFinex: Why should I mint and own an NFT?
DBD: To mint your NFT, the easiest route is to visit our website or use our app at daybyday.io. On the top menu, you'll find the "Mint NFT" button. From there, you can either opt for a randomly generated policy or tailor it to your preferences. Whether you're safeguarding electronics from theft and water damage for 60 days or leaving it to chance, the choice is yours. Similar to choosing lottery numbers, you can customize or let the system decide.
Reward distribution for all NFT owners is just around the corner, including benefits from staking and more. In the next couple of weeks, premium rewards will start flowing.
We're available on major marketplaces, and our custom marketplace offers additional insights. Platforms like Opensea or Magic Eden provide visibility into NFTs for buying and selling. If you're eyeing a secondhand NFT, checking its earnings can be a valuable indicator.
Visit our website or custom marketplace to witness NFTs already earning rewards. We've conducted test transactions, and the system is live and ready. All that's left is a few final touches, but it's happening. I encourage you to explore and see for yourself if you haven't already.
DigiFinex: If I own an NFT, what kind of rewards can I- get?
DBD: As of now, NFT holders receive 5% of the total premium, and this percentage may see upward adjustments in the future. Picture this on a larger scale—imagine 100,000 users generating $500 in premiums, with all those rewards flowing to NFT holders. Currently, there are approximately 11,400 available NFTs, making ownership potentially quite lucrative. We've had interest from brokers in traditional industries who view these NFTs as valuable assets on their balance sheets, generating ongoing revenue.
DigiFinex: What chains are DBD NFTs available on?
DBD: Currently, you can find us on Algorand and Polygon, and there's more in the pipeline. Our strategy is demand-driven, and initially, Algorand saw high demand, prompting our presence there. We're also active on Polygon. As demand evolves, so will our chain selection. If you have a particular chain in mind that you'd love to see us on, don't hesitate to reach out. Your suggestions matter, and we're open to exploring new chains based on user preferences.
In conclusion, our journey through the intricacies of insurance and NFTs with Day By Day has been nothing short of enlightening. From the roots of their innovative approach to the potential reshaping of the entire insurance landscape, the AMA was a testament to the evolving dynamics in the digital space.
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