DuckDAO X PolkaCover, Redefining insurance in the digital age.


DuckDAO is a prominent and well respected crypto-based incubator that helps promising projects achieve their full potential by leveraging the investment power and buzz making potential of our community. We are partnered with them to develop the PolkaCover project to bring in the larger community of crypto users.

Below is a quick recap for those who missed out on the informative AMA session with Kunal Sadani, CEO of PolkaCover, and Limmy, community representation of DUCDAO.

How does PolkaCover differentiate itself and what plans do you have to overcome the first-mover advantage of other insurance platforms currently on the market such as Nsure or Nexus Mutual?

Well… It would probably be best to clarify that we are not competing but providing complementary services within the crypto ecosystem with other insurance providers

When comparing Nsure/Nexus Mutual, our solutions & road to market are quite different. Nexus Mutual & Nsure are focused on providing Smart Contract Insurance/Cover which is managed through community pools that is aimed towards the astute crypto user (You need to have a basic understanding of use Metamask & how community pools work to be able to transact on their platform ) We are targeting the Mass-market of crypto users providing mass-market products ( i.e. exchange hack/exchange bankruptcy etc.) which are not being provided by any provider in our space. The platform is being designed to have 2 step user experience to make purchases

Our P2P Insurance platform might have similarities with Nexus Mutual “in structure” but the products are completely different. Separately, we are also building an insurance marketplace which is with traditional insurance providers who would be providing various other insurance products for crypto users which is unique to our platform. We actually are also looking to onboard Nexus Mutual / Nsure & other insurance protocols where we would create an insurance marketplace of decentralized providers in 1 place.

In terms of First mover advantage, Nexus mutual is currently the only provider who has 1 product available and has done a great job in opening up the insurance vertical in crypto. However, The entire crypto space is wide open to us as the products we are bringing to space has no competition.

Insurance is a sensitive topic as it requires personal data to adequately track what needs to be insured. As we know, the blockchain is all about decentralization and being anonymous. How does PolkaCover tackle this issue? Will there be any legal complications due to storing user data etc? As an extension to the above question, data protection is key in insurance. How will our data be stored and protected from hackers? Has the smart contract(s) been audited?

Data protection is key and is even more important when it comes down to providing insurance services. When working in our insurance marketplace model, we won’t be storing user data but would act as an intermediary between the user & the insurance company.

In its simplest form, user data received on the platform is transmitted to the insurer via API’s ( routing it through our oracle partner).

The process repeats during policy issuance.

Crypto Insurance products, as they are a new vertical, are a heavily regulated industry globally. How will you get around this, and in which jurisdiction(s) will you focus?.

For crypto-insurance, the initial access will be available will be about 120 countries. We would know the exact number of countries once we get the final sign off from our insurance partners on our crypto products

In terms, of jurisdiction, although our Business team is based in Dubai ( and the tech team is based in India), the marketplace platform will be incorporated out of BVI to allow us(and the insurers) to be able to distribute these policies to a global audience. as Dubai does not allow such flexibility to distribute insurance products globally.

Most of the western countries ( barring the US/Canada) will be available to purchase in the initial launch. As US/Canada is a heavily regulated market, we would look at adding them on at a later stage once we receive approval from the insurers & our legal advisors.

So is this a similar case to what you mentioned above with data protection — the … “fine detail” of the regulation is handled by the insurance providers/trustees in each jurisdiction that you are working with?

Yes. As Insurance & crypto regulations need to be considered when we go live, we need to work in jurisdictions where the insurers ( and crypto users) can access these products without penalties :)

Are there measurements in place to prevent fraudulent claims? As we know in the traditional insurance space, one can easily create a fraudulent injury report/death certificate to claim a huge insured sum. How does PolkaCover ensure all claims are valid?

Unfortunately, fraudulent claims happen in all models of insurance (traditional or P2P).

Insurance plans are always made in good faith that the larger audience wants to use the policies to safeguard their interests ( and not defraud the insurer )

When it comes to claim management in the traditional insurance providers, the claim payouts are governed based on the T&C’s of the insurance providers. In case, fraudulent claims are identified, the T&C’s are refined with new clauses to ensure fraudulent claims don’t get paid out any further. This method keeps refining the product & also allows the larger (good faith) policy users to be able to get better pricing in the long run.

In our P2P platform, claims assessment is managed in 3 steps.

1) Insurance Risk Pool participants

2) Claim Assessment Stakeholders

3) Governance stakeholders

As P2P insurance is a community-based claims management model.

If a claim is raised declined(by over 10%) and goes into a dispute with the policyholder, a review is held by a second level authority (Claim Assessment Stakeholders).

In case the case remains declined and still is disputed by the user, the final assessment is taken by the Governance body (which includes the PolkaCover core team)

In case any bad actors, are found in the risk pool/assessment stakeholders, their Stake is burned by the governance body. This is to control any misuse of power.

We would be shortly releasing V2.0 of the whitepaper over the next week where you would have a lot more details of the token ecosystem in the P2P insurance platform.

Do you feel that the risks of insurance fraud are exacerbated by non-KYC relationships, where it may be harder to track and prosecute a bad actor? And do you think, much like road rage and internet trolling, this anonymity might bring out this sort of bad behavior?

Not to a degree of concern.

I feel there are equally bad actors even in KYC based transactions (eg. Enron !). It all boils down to a person’s intention to defraud or troll.

We are also working on building out products to ensure fraud is minimized and will keep working on improving the product so the larger audience benefits from our products

If there is a higher level of fraud witnessed in Non-KYC transactions, the pricing gets expensive …

How would one determine how much a policy would be insured for/paid out without the need of human interaction if all underwriting and claims are automated? Will there be any form of interaction from the team (or administrators) with the client? If so, how decentralized can PolkaCover be?

In the traditional insurance models, product/ pricing is managed by the insurer. In our P2P model, initially, the Governance team (PolkaCover) would be working with insurance underwriters (pricing experts) when we build out our initial products. Once there is enough experience & data of claims. We would hand over the pricing function to the community. This is just to ensure that the community gains the needed experience from experts to understand how risk assessment is done. Once the knowledge transfer is done, we would hand over all aspects of P2P insurance management to the community to make it work similar to a DAO.

In regards to the token usage, “All claims are paid using the token. Customers can choose to hold the payment in the token or choose to convert to fiat currency.” Wouldn’t this cause a huge supply jump and cause the price to inflate? I understand there are incentives to hold the tokens longer but this could still be an issue. Wouldn’t it be better if the claims are paid in USDT or other stable coins?

Yes. We would be providing both options to users (Acala’s Stablecoin or CVR). What we have witnessed from our experience is that once a claim is made for the user, the intrinsic value of our provider/token grows substantially due to the positive user experience which gains the user long term loyalty. Such experience creates additional value for users to again take out another policy & hold onto our token for future transactions within the platform.

We are also building our several other use cases on the token to build further retention of our token once a claim is transacted which would be shared in the next version of the whitepaper.

AI and machine learning are buzzwords nowadays and a lot of projects use them in their roadmaps. Can you explain in simple words how your artificial neural network will work and what will be some of the parameters for machine learning you’ll use in PolkaCover claims? Do you really add additional value to them or you could do it without those technologies?

We have worked hard not to use any technical jargon in our whitepaper or

website and will try to answer the question in that same manner!

As we begin getting a high volume of policy issues, we start receiving a lot of insight into the user journey’s & motivations to transact on the platform. With the data, we would be able to customize the user experience & journey based upon their expected requirements.

When it comes to claims management, Claims can be divided into 2 broad categories.

1) Low payout value ( below USDT 1000)

2) High payout value ( Above USDT 1000)

When it comes to low payout values, the administration work that goes into validating a claim would end up financially costing more to the insurer than the claim payout value. In such scenarios, when there is significant claims data, we are able to expect & program the claims platform to allow a direct payout (in low payout cases) to the claimant without the intervention of a third party based on documentation provided. These claims are then reviewed on a monthly basis to further refine the automated claims payment engine.

P.S — I didn’t use AI or machine learning in my response ;)

Which cryptocurrencies and traditional payment options will be available on the platform, and what benefits are planned for people using CVR instead of other cryptos or stable coins?

For purchasing Crypto Insurances products, You would need to purchase it using the CVR token only.

For the other insurance products, (Health/ Life/ Home, etc. ), you can pay in CVR, BTC, ETH or USDT to start with. However, you receive discounted premiums for paying with CVR.

How will this work? It seems like something that would be very difficult to implement.

Well, the simplest way to explain this is

1) This is not open to all cryptocurrencies but mainly larger (less volatile) cryptocurrencies

2) Currency drops 25% for over 24 hours (less than 24 hours, not eligible)

3)The price needs to remain at a lower price point for over 24 hours

4) the First 15% is at your risk, the remaining price drop is covered by the insurer

In the traditional insurance market, the number of payouts is gathered from the proceeds of selling the insurance. Will PolkaCover be adopting the same revenue-generating system? If not, what other ways are you generating revenue so that there are sufficient funds to be paid out?

Well, the revenue models work differently depending on our platforms

1) Traditional insurance marketplace — We get commissioned on every policy sale from our insurer

2) P2P insurance marketplace — We receive a percentage of the premium to manage the operational cost of the risk pool/governance/pricing support/R&D

P2P insurance as a business model is already being offered without blockchain technology. What does PolkaCover do differently with the platform and what are the benefits of using PolkaCover for the clients?

Yes. P2P insurance is offered outside blockchain technology however, the products/services offered are geared for a non-crypto user(traditional products). However, a lot of claims assessment & operations costs still remains centralized in the process

although being “P2P”.

One of the main benefits of our platform is we are looking to launch niche products ( eg. Loss of NFT’s due to impermanent loss) which are geared & designed for crypto users and which are not “supported” by traditional insurance companies.

Separately, we are moving towards creating a model that is completely governed & managed by the community once there is enough data insight & experience of managing these different functions within the insurance product management.

Your offers cover key areas like health insurance, crypto-insurance, life insurance, travel insurance, education plans, and home cover. Will there be a fiat to crypto and vice versa mechanism on your platform to accommodate all types of users?

Yes. We are speaking to a few providers which we would integrate into our user’s account wallet on our portal allowing a direct exchange between CVR/USD \ CVR/ETH to start with.

We would look at adding more currencies but initially, we would have USD & ETH (and DOT once we migrate to Polkadot) for conversion.

Any plans in the future to offer not only user-level insurance but also exchange/Institutional level insurance? I’m sure a lot of crypto-based companies would prefer to have their assets insured within the crypto sphere for ease & compliance.


Unfortunately, the risk levels/assessment ensuring an entire exchange is out of the appetite & scope of our (and our insurance partners) expertise.

We want to play to our strength & focus on the team’s experience to build an easy to use insurance marketplace for retail users.

I’m really impressed to see that your formation started before the Defi hype and product won’t go live until Q2 next year which means you are taking your time and doing your due diligence instead of rushed launches such as Andre Cronje’s advised $SAFE now rebranded as Cover Protocol which lost investors trust early on because of their lack of preparation. What would you say has been your biggest hurdle or achievement that you’ve been able to overcome/achieve so far which gives you an advantage over any present or future competitor?


We have been speaking & educating traditional insurance companies for almost a year to warm them up to provide products for crypto users and it took us almost 10 months before we received an initial go-ahead.

It is a mammoth task to make such insurance companies provide support on such products and this is key in creating a robust product suite for our users.

Once we have a couple of providers on board, the rest generally follow …

The global insurance business is one of the most competitive markets and unfortunately, sometimes very lengthy and ungrateful. Without the background of partnerships with global actors and multinational corporations, it might be difficult to establish/get adopted across the market.

There are some rumors of big partnerships but there’s nothing concrete currently for people doing their due diligence. Is there anything big planned or do you have to handle everything confidentially?

Not yet.

We have 2 providers who have given the initial approval to proceed on these products, however, we would be able to share the details once the insurance company has provided their final approval.

As these are traditional companies we are dealing with, we need to respect their requirement of confidentiality until they allow us to share the details.

Trust me! There is no one keener to share details of our partners than us but it has been an uphill journey to get these providers to a stage where we are confident to get out these products and cannot risk sharing information before we have their blessing …

Could there be a reinsurance option/ structure built into P2P PolkaCover insurance? Or do you predict there to be no market for reinsurance in a decentralized model?

We actually have this planned in our P2P insurance platform to reinsure a part of the risk using a reinsurance company ( Thus reducing the risk of users in our risk pool) and there is work that is happening around this.

We would be able to share more information on this once we have a concrete partner supporting us for our products.

I’m currently paying into my pension plan. I don’t have access to the funds ‘till I turn 65. I’ve been looking/shopping around for better alternatives that offer flexibility that borrows against the funds that are invested in pension schemes. Could you guys offer a product like this on your platform in the future?

Can you explain in detail how the token burn with buying back and burning tokens

from the open market on a quarterly basis will work?

Once the platform is live, we would be generating revenue for the policy sales ( from the traditional insurers) and operations revenue for the P2P insurance platform in the longer run.

After we covered our operational costs over a quarter, from the remaining revenue available to us, we would use 25% of the revenue to buy out tokens from our listed exchanges and burn them out of the supply ( similar to how Binance does it as well )

What is the end goal of #PolkaCover? To compete with the giants like AIA, Allianz, Great Eastern, Prudential? Or are you just simply bridging insurance and cryptocurrency and giving the users the alternative and providing coverage for crypto. And happens if any of the giants were to step into the crypto space also.

Well … We would not compete with them but instead would onboard them as partner’s onto our insurance marketplace. We would work as a distribution partner for their products.

What is the difficulty in bridging the traditional insurance market and cryptocurrency? How do u intent to tackle it?

The main issue faced is the lack of data & understanding of the crypto space which had been the barrier for entry for traditional insurers which we are working on breaking down.

Are Deals set up with larger companies to provide access to the insurances? From what I have heard you’re dealing as a connection spot between the user and the company. #PolkaCover

Yes. We are speaking to several insurers, However, we have 2 providers initially we would be launching with.

What do you think about crypto?

I love it!

I quit my well established traditional day job to build PolkaCover because I believe in a decentralized future and want to be a key member of the movement.

Do you consider yourself an aggregator?

Yes. I would exactly work as an aggregator in the traditional marketplace. However, we would be working in product creation/claims administration in our P2P model

I understand you want to use big data for underwriting and the amount to be insured to clients. What if there were to be a case by case basis type of claim? Will there be an administrator we can contact? Or is it fully decentralized

Yes. For larger claims, the process would require manual intervention by the insurer or Governance body.

The smaller claims would move towards complete automation in the medium term

Are there details for the staking of CVR tokens? Is it possible for small investors and supporters of PolkaCover or only with higher amounts of CVR?

Not Yet. The staking requirements are in development for the P2P insurance.

For more information read our whitepaper on our website and learn more about how we’re changing the insurance industry for our crypto users

Follow us on our channels to be updated on all our developments:

Twitter: @Polkacover






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The First DeFi Insurance marketplace for the global crypto ecosystem