PolkaCover Glossary Terms

PolkaCover’s aim of disrupting the blackbox insurance industry is what we follow in every aspect. In order to do that, it is of paramount importance that all crypto users know exactly what we mean even on technical documents such as our whitepaper. That is why we have compiled a glossary for your convenience so that users may refer to it in order to understand any terms.

  1. Actuarial team- The underwriting team that designs and formulates the insurance products
  2. Blackbox industry- A term used to refer to an industry which obfuscates its data and so outsiders cannot see the inner workings and/ or details
  3. Capital risk fund- Capital risk fund reflects the ability to lose part or all of an investment It refers to the entire asset gamut that is not subject to a complete return guarantee for original capital
  4. Centralised marketplaces- A structure for financial markets wherein all orders are routed to a central exchange and there are no competing markets
  5. Claim- The phenomenon of a policyholder requesting the insurance company to compensate them in case a covered event occurs
  6. ICO- Initial Coin offering. Investors can buy the token after its official listing on an exchange.
  7. Collateral- Something set against a loan as a security
  8. Coverage pricing- A practice of obtaining an artificially high price to show a higher level of competition
  9. CVR- PolkaCover’s proprietary token which people can use to purchase products on PolkaCover’s platform
  10. Data immutability- The concept that data cannot be changed at all
  11. Decentralized- In crypto, decentralisation refers to the delegation of power from governments which happens in the form of traditional currencies to crypto based currencies where users have the power
  12. DeFi/ DeFi Insurance- Decentralised finance is a system wherein traditional financial instruments are traded in the crypto space using blockchain technology
  13. Governance fees- This is a nominal platform maintenance fee to govern the platform
  14. Insurance claim settlements- When an insurance company pays a policyholder after they have made a claim
  15. Insurance DAO- Autonomous claims management
  16. IoT- Internet of Things A system wherein multiple Internet connected devices can transfer data independently, without human intervention
  17. Oracle chain- A named series of programs which have been linked together in order to fulfill a combined objective
  18. P2P insurance- Peer to peer insurance
  19. Parachain architecture- A data structure that is made use of by Polkadot
  20. Peer-to-peer- A model in which 2 people transact/ deal directly
  21. Phishing- The practice scammers engage in of masquerading as a reputable company and sending emails in order to access information
  22. Polkadot- Polkadot is a multi-chain interchange and translation architecture which enables customised side-chains to connect with public blockchains
  23. Pool commissions- A pool of money set aside just for commissions
  24. Premiums- An amount paid for insurance contracts
  25. Public ledger- Publicly available information about all transactions
  26. Reinsurer premium- The premium that the reinsurer receives from the insuring company
  27. Risk premium- The amount a holder would make from a risky investment that would incentivize them to prefer the risky investment as opposed to a risk free investment
  28. Self insure- When a person/ company sets aside a pool of money to be used to remedy an unexpected loss
  29. Smart contract- An embedded agreement within the code of a transaction between buyer and seller, usually in blockchain transactions
  30. Stakeholders- Those who are holding a token
  31. Staking- When a person locks their capital investment for a period of time in order to earn interest
  32. Stop loss insurance- A policy that protects insurance companies from large claims
  33. Substrate- A framework that allows for creation of purpose built blockchains
  34. Token burn- When tokens are removed from circulation in order to regulate prices
  35. Token- Tokens are used to raise funds for the cryptocurrency and can be used to purchase products from the issuer
  36. Validators- A validator is responsible for ensuring that transactions are accurate as well as legal
  37. Whitepaper- A technical document containing all the details of the project

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The First DeFi Insurance marketplace for the global crypto ecosystem