FiDa - Risk Transfer Contracts

[GENERAL] Name and surname of main applicant

Rodolfo Hansen

[GENERAL] Email address of main applicant

rhansen@kitsd.com

Additional applicants

The whole the FiDa Team.

Leads: Rodolfo Hansen, Andrew Bowness.

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

The risk transfer contracts and code developed will be released under an Open Source license after a period of time necessary to develop the community and ecosystem necessary to defend our position in the market.

[METADATA] Category of Proposal

RealFi

[METADATA] SDG rating

8: Promote sustained, inclusive and sustainable economic growth

9: Industry Innovation and infrastructure

10: Reduced Inequality

[IMPACT] Please describe your proposed solution.

By introducing Insurance Tech to the Cardano Ecosystem through a Risk Transfer Protocol, we seek to unlock capital efficiency for everyone, creating a more inclusive and equitable insurance landscape.

One of the key problems we aim to solve is the lack of capital willing or even able to allocate in the insurance market for otherwise hard to ensure policies. Traditional insurance companies have dominated this sector due to overhead and upfront costs. As a result, many under-served communities and individuals face significant barriers in accessing adequate insurance coverage.

Our approach stands out by leveraging the decentralized nature of the Cardano Ecosystem to democratize insurance and promote financial inclusion. By implementing a Risk Transfer Protocol, we can empower a diverse range of stakeholders, including individual investors, small businesses, and community organizations, to participate in the insurance market. This inclusivity will not only unlock new sources of capital but also foster competition, driving down costs and expanding coverage options for individuals and communities that have historically been under-served.

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

Integrating Insurance Tech into the Cardano Ecosystem aligns with Cardano's core values of sustainability, transparency, and inclusivity. By supporting this proposal, Cardano can demonstrate its commitment to leveraging blockchain technology to address pressing global challenges. Furthermore, this endeavor aligns with the United Nations Sustainable Development Goal 10, which calls for reduced inequality. By bringing insurance solutions to under-served populations and enabling participation from diverse stakeholders, Cardano can contribute significantly to achieving this goal and solidify its position as a leader in driving positive social impact.

The aims of the challenge that our proposal specifically addresses include expanding the Cardano community, strengthening the ecosystem, and solving a key problem within the insurance industry. By attracting users and stakeholders from the insurance sector, FiDa will bring new participants into the Cardano community, expanding its reach and diversifying its user base. The introduction of Insurance Tech to Cardano will enable the ecosystem to become stronger by unlocking new avenues of growth and innovation within the insurance industry.

The project's impact on the Cardano ecosystem goes beyond funding the project team. It brings tangible value by providing a real-world use case for Cardano's technology, demonstrating its scalability, security, and applicability to the insurance sector. FiDa has the potential to attract significant usage and transactions within a reasonable time-frame. While specific numbers may vary based on market adoption and external factors, we expect FiDa to attract a substantial number of users and facilitate a considerable volume of insurance-related transactions.

The introduction of FiDa and Insurance Tech to the Cardano ecosystem will position Cardano as a leading blockchain platform for insurance solutions. It will foster partnerships with insurance companies, brokers, and investors, further strengthening the ecosystem's reputation and reach. Additionally, by addressing the challenges of limited capital allocation and competitiveness for smaller investors in the insurance market, FiDa will promote financial inclusion and reduce inequality, aligning with Cardano's core values.

[IMPACT] How do you intend to measure the success of your project?

While the primary goal of this submission is not directly tied to business aspects, we can still measure several key indicators on the preview testnet to gauge the project's impact.

Quantitative Metrics:

1. Number of Policy Contracts on-chain: This metric will track the number of insurance policy contracts that are successfully deployed and managed on the Cardano blockchain through the FiDa protocol. The increasing number of policy contracts indicates the adoption and utilization of the Insurance Tech solution within the Cardano ecosystem.
2. Number of Investors: We will measure the number of investors actively participating in the FiDa protocol. This metric will reflect the attractiveness of the Insurance Tech solution and its ability to engage a diverse range of stakeholders within the Cardano community.
3. Total Value Locked (TVL) Managed by the Protocol: TVL is an important measure of the economic activity and adoption within a protocol. It reflects the value of assets held and utilized within the FiDa protocol. Increasing TVL demonstrates the growth and trust placed in the Insurance Tech solution, indicating its positive impact on Cardano's productivity and growth.

Qualitative Metrics:

In addition to quantitative metrics, we will also gather qualitative feedback and opinions from users to assess the project's success. This can be achieved through user surveys, feedback forms, and community engagement. Qualitative measures can provide valuable insights into user satisfaction, usability, and the overall perception of the FiDa protocol within the Cardano ecosystem.

Short and Long-Term Impact:

In the short term, the innovation of the FiDa protocol will stimulate productivity and growth within the Cardano ecosystem. It will attract new users, investors, and partnerships from the insurance industry, expanding the ecosystem's reach and network effect. The introduction of Insurance Tech will also contribute to the diversification of use cases on Cardano, further solidifying its position as a versatile blockchain platform.

In the long term, the impact of FiDa and Insurance Tech on Cardano's productivity and growth will be even more pronounced. As the protocol gains traction and demonstrates its value proposition, it will continue to attract a growing number of insurance policy contracts, investors, and TVL. This increased adoption will result in a vibrant ecosystem with a thriving insurance market on Cardano, driving economic activity and creating opportunities for further innovation.

[IMPACT] Please describe your plans to share the outputs and results of your project?

The idea is to allow for the construction of market places on-top of this developed risk-transfer protocol. Particularly we will continue past the protocol onto a FiDa web application which brings in participants from the insurance space to handle their business on top of the Cardano Block Chain.

We will leverage the insurance industry media. Having relationships with key brokers in the industry and key journalists who can publish information on key industry outlets (e.g. artemis). This will raise our profile within the industry and highlight Cardano as a key destination for insurance industry investors.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

We possess the necessary capabilities and track record to deliver our project with high levels of trust and accountability. Our existing capabilities demonstrate why we are best suited to undertake this initiative and effectively manage the allocated funds.

1. Technical Expertise: We are working with Developers from BinarApps who worked on Byron Network and are also contracting directly with IOG. With them, we have already made significant progress in the development of the Risk Transfer Protocol on Cardano. The pseudo-code for the protocol, utilizing the concepts available in Plutus is already written. Furthermore, we have already established a codebase for two of the validators in actual Plutus v2 The creation of which can be seen in these TX: . This technical expertise showcases our deep understanding of the Cardano ecosystem and our ability to leverage its features effectively.
2. Prior Commitment and Dedication: Despite limited resources and time constraints, we have been actively working on this project. Currently, we allocate around 4 hours a week to its development. However, with the Catalyst Fund support, we will be able to dedicate our full-time efforts to building out the contracts. This commitment demonstrates our passion and determination to deliver the project successfully.
3. Transparent Project Management: We have a clear project management structure in place to ensure transparency and accountability. We maintain regular communication channels to provide updates on the project's progress, milestones achieved, and any challenges faced. By adopting an open and collaborative approach, we foster trust and accountability among our team members and stakeholders.
4. Proper Fund Management: We recognize the importance of managing funds properly and maintaining financial integrity. To ensure this, we have established robust financial processes and controls. These include implementing clear budgeting procedures, tracking expenses, maintaining accurate records, and adhering to regulatory and compliance standards. We understand the responsibility associated with handling allocated funds and will prioritize their appropriate usage for the project's advancement.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

The main objective is to demonstrate a successful transfer of risk for an insurance contract across its lifetime.

We need to cover:

• adequate raising and locking of collateral on the protocol.
• premium payment distribution.
• cancellation due to failed premium payments.
• partial claims on insurance.
• full claims on insurance.
• completion of insurance contracts and releasing of unused funds.

Additional features like alternative monetary denominations, and secondary market trading would fall outside the scope of this proposal.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

We plan on organizing milestones through the lifecycle of a policy contract on-chain:

As the policy evolves several distinct validators (smart-contracts) come into play:

15% Creation of Policy Token and on chain registration of policy parameters.

15% Policy Card Purchase

20% Policy Acceptance State Transfer once all FiDa cards have been purchased.

10% Premium Distribution.

15% Policy Claim Events.

25% Policy Completion Processing.

Each individual validation script above will be hashed and confirmed on-chain in the testnet as we work on completing the exact process of risk-transfer.

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

For each milestone, we will have deployed a new smart contract on-chain.

Evidence of the above milestones will be observable in the preview testnet, for multiple policy contracts.

We will also coordinate, and maintain the community informed about the status of the FiDa project and the release of these contract's source code under an Open Source License.

Ultimately, once the rest of the components to FiDa the business are setup we aim to fund 5 small policies through the sale of FiDa cards.

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

We will use the milestone payment mechanism internally to ensure costs do not escalate beyond our request and further enhance our engagement towards successful outcomes.

The team will be organized and budgeted as follows:

• Product Manager $32,000.00
• Architect $36,000.00
• UI/UX Engineer $24,000.00
• Backend + Plutus Developer $36,000.00
• Frontend Developer $24,000.00
• Automated Tester $18,000.00

Additional costs will be handled as needed out of pocket e.g. server costs, incidentals, etc..

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The cost of the project represents value for money for the Cardano ecosystem in several ways:

1. Potential Impact: By bringing Insurance Tech to the Cardano Ecosystem through a Risk Transfer Protocol, the project has the potential to unlock significant value and opportunities. Insurance technology can provide greater financial inclusivity, risk mitigation, and economic stability, aligning with the goals of reducing inequality. The long-term benefits and positive impact of this integration can outweigh the initial costs.
2. Market Potential: The insurance industry is a multi-trillion-dollar market globally. By leveraging the Cardano Ecosystem to introduce Insurance Tech, there is an opportunity to tap into this market and create new revenue streams. The costs associated with the project are justified by the potential market growth, attracting new participants, and expanding the ecosystem's reach.
3. Future Returns: While the upfront costs may seem significant, they are an investment in the future growth and development of the Cardano ecosystem. The integration of Insurance Tech can attract new users, increase transaction volumes, and enhance the overall ecosystem's productivity and value. The long-term returns and benefits generated by this project can far exceed the initial expenditure.

Regarding the costs of the project, they have been carefully assessed and justified based on various factors:

1. Research and Development Efforts: The costs associated with research and development, including the design and implementation of the Risk Transfer Protocol, have been evaluated based on the complexity of the project, the expertise required, and the time commitment involved. These costs are aligned with industry standards and reflect the resources necessary to deliver a robust and effective solution.
2. Technical Expertise: The project requires specialized technical skills, particularly in Plutus and Cardano's development environment. The costs associated with hiring or engaging technical experts are based on prevailing freelance rates, industry benchmarks, and the level of expertise required to ensure the project's successful implementation.
3. Testing and Security: Rigorous testing and security measures are essential to validate the feasibility and reliability of the Risk Transfer Protocol. The costs associated with testing, audits, and security assessments reflect the investment needed to ensure a secure and trustworthy solution, aligning with industry best practices.

The costs of the project have been determined by considering the value it brings to the Cardano ecosystem, the potential impact on reducing inequality, the market potential, and the investment required for research, development, and security. While the costs may appear high, they are justifiable based on the long-term benefits, potential returns, and the value proposition that Insurance Tech integration can offer to the Cardano ecosystem.

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.

I Accept