[ANN] Vernam - The World's First 0% commission insurance on blockchain
Vernam - The Future Of Insurance
THE VERNAM PLATFORM
Our plan is to use blockchain technology to resolve the inefficiencies on the insurance market, resulting from the asymmetric information and lack of transparency between end customers, brokers, and insurance companies. We will create a marketplace, powered by a decentralized ledger, which will allow providers to optimize their riskcalculations, while customers will benefit from lower insurance premiums! To provide a comprehensive experience, we will set up a network of brokers in different countries to be operated by the marketplace, which in the future will eventually include our proprietary blockchain powered C2C insurance company, operating with Vernam tokens. At the same time, our decentralized blockchain based platform will be open to all stakeholders, who would like to take advantage of its customer, insurance providers and their insurance products data base as our decentralized model will increase transparency and decrease transaction costs.
BLOCKCHAIN AND MARKETPLACE
One of the most important questions that all recent ICOs face is “why is blockchain even necessary for this project?” This is a very valid question, having in mind the proliferation of initial token offerings and shared ledger-based initiatives.
Blockchain technology is an excellent mechanism for transferring and securing funds. It can also support the complex multi-party agreements between participants in the insurance industry value chain, using smart contracts.
Since data remains stored in a re-distributed ledger, which constantly validates itself and is free from central authority, clients can be sure that their data will not be tampered with. Simultaneously, user identity and transaction history can be securely managed, providing the information and transparency, which the insurance industry is currently missing. Because of the constant revalidation, data cannot be manipulated and no external “manager” or authority is required.
The win-win scenario!
The immutable decentralized ledger holds advantages for both end clients and insurers. Blockchain can be utilized to create a tamper-free, perpetual record of clients’ insur- ance history, which can be used by insurers to optimize risk assessment, whereas from customers’ perspective blockchain can be the key to lower their own insurance premiums. Over time, maintaining the shared ledger of insurance transactions, including premiums and claims history, will create a substantial database which may be used to derive a customer “insurance risk” score, similar, for example, to one’s credit rating. While similar solutions are already in development, using blockchain would make the data itself free and available to everyone – unlike proprietary databases. This “liberalization” that we are about to undertake will affect positively the overall profile of Insurance and will create an additional value for all the companies who are participating in Vernam. The first ones adopting our approach will be considered game changers and this will result in popularization of their services as the general perception of the public and the clients will conclude that right now these are the companies with the safest and most transparent insurance products. Consequently, with the development of the project, Vernam will become the only real alternative to traditional insurance practices and the gains from the “new generation” profile, backed up by real efficient and very convenient online platform, will become more important than any other image-making activity initiated by the insurance providers. Data protection is an issue, central to the success of similar projects. The General Data Protection Regulation (GDPR) of the European Union and other similar legislative acts aim to regulate personal and “sensitive” data, including the rights of access, erasure, and portability of personal information. Storing sensitive information on the blockchain secures us GDPR compliance, as pseudonymisation and encryption of personal data are one of the key measures to ensure a level of security according to Art. 32. Through the use of cryptography (digital signatures, encryption, time-stamping) and systemically embedded economic incentives for network maintaining entities, blockchains provide a secure way of storing and man- aging information, including personal data. “Hashing” the data – e.g. transaction record, vehicle or property ownership registry, etc. creates a compressed digital “snapshot”, which is identifiable only to the involved parties and cannot be “reconstructed” without reveal- ing the confidential keys, used to create the hash. As described in a recent Forbes article: “The collecting, hashing, and then discarding of all but the hashes of your personal data permits a globally distributed digital system to behave in a very similar fashion to the plastic ID card in your wallet. As long as you can keep your personal devices secure nobody has your ID or personal information, but you can prove yourself when you need to do so…”17
While hashing makes personal information safe, it is also likely that customers themselves will be happy to maintain their transaction history on the shared ledger as this will help them to eventually lower their insurance premiums. Also, by not having a central author- ity behind the ledger and by keeping the transaction history public (i.e. by not trying to monopolize the information and to profit from it), the platform will increase its value to potential stakeholders.
Having in mind that market middlemen take around 20% of each “deal”, releasing the Vernam ledger as a decentralized solution will return this value to the end cus- tomer, allowing cheaper insurance premiums.
The Vernam platform’s main goal is to incentivize clients to purchase insurance products using the platform, in return for which they will receive a crypto currency- denominated award in Vernam tokens of up to the typical broker’s commission.
The platform will have a public and a private section. The former will provide insurance-related information. The private one will allow clients to purchase crypto digital and insurance products. These products will be in the form of smart contracts, deployed on Ethereum network and their autonomy - triggering a set of events when all prerequisites are met – will allow the replacement of the “paper” business, making it paperless and accelerating transparency and data integrity. Vernam will be an archetypal model of the perfect mix between digitalization, full digital security, optimization of an otherwise clumsy process, customer care, customer data protection, liberalization, business and social purity. Our online system will be self-reliant because one of its definitive features is the capacity to create in-built rules which cannot be circumvented even by the system itself. This is the level of trust and care expected by any global new era service. A philosophy also supported by the encryption technology behind Vernam which is the safest possible!
Of all the methods of encryption ever devised, only one has been math- ematically proved to be completely secure. It is called the Vernam cipher or one-time pad. In cryptography, the one-time pad (OTP) is an encryption technique, requiring the use of a one-time pre-shared key of the same size (or longer) than the message being sent, which cannot be cracked.
The “worth” of all ciphers is based on computational security. If a cipher is “computationally secure” this means the probability of cracking the encryp- tion key using current computational technology and algorithms within a reasonable time is supposedly extremely small, yet not impossible.
In theory, every cryptographic algorithm except for the Vernam cipher can be broken given enough cipher text and time.
We offer you an exclusive chance to become part of a historical moment for the insurance industry! Our token sale process will start on 15.05.2018 and last until 15.07.2018. Exactly 50% of all 1 billion VRN tokens will be available during the event. New tokens will never be created. Unsold tokens will be burned. Purchasing coins during the pre-sale period will confer of up to 40% discount
The token will conform to the ERC20 standard. The minimum target for the token sale is set to 40 million VRN tokens while the hard cap will be set to 500 million VRN tokens. If the minimum goal is not reached, the Vernam team will make a full refund to the contributors.
Token Distributions:A total number of 1 billion VRN tokens will be created, from which 50% (500 mln) will be availаble in the Token Sale. The Token Sale ends if the hard cap has been reached or on its closing date (15.07.2018) whichever comes first. In case the token sale is not successful (i.e. the “soft cap” has not been reached), all contributed funds will be returned to token sale participants. Besides the token sale proceeds, additional 3% will be distributed to early stage project supporters in the form of Airdrop and Bounty. Furthermore, 7% will go to our advisor’s, half of which locked and other “project champions”. 20% will be set aside for an Internal Reserve Fund. These 20% VRN will be locked in a smart contract and used only for covering our CryptoSafe insurance product. (When a client is insured through our CryptoSafe product and a claim occurs it will be paid through this fund after it is approved by a third party claim management company.) 5% Liquidy Fund will be used for reserve to cover operating costs. Finally, a 15% share will be awarded to the project founders and the Vernam team to recognize their role in digitizing the insurance industry. These will have a vesting period of 18 months to ensure commitment.
Token Sale Event Stages:
We are ready to go! The token sale will include five distinct stages, starting from 15.05.2018 and lasting until 15.07.2018. The maximum number of tokens, which will be available during the event is 500 million VRN. Initially, a private placement will take place, with token distribution reserved for early stage project supporters and contributors. Up to 10% of the VRN tokens will be sold during the private placement stage.
The token sale itself will start on 15.05.2018 and last for 61 days!
The first stage of this process, called “three hot hours” will make VRN tokens publicly available to the most enthusiastic contributors. This stage will last from 06:00am UTC to 09:00am UTC, during which Vernam tokens will be sold for USD 0.051 (representing a 40% discount of the “standard” token sale cost). To minimize “token dump”, which is relatively frequent after the end of a new token sale project, the amount of VRN that have been purchased during the “three hot hours” will be partially locked after the completion of the token sale – each contributor that has purchased tokens during the “three hot hours” will be able to make use of 1/6 of its VRN per month, over 6 months’ period. No more than 20% of the tokens for sale could be sold during this stage – if the limit is reached, tokens will be available for purchase at the next stage’s price.
The next stage, lasting for 8 days, will start at 09:00am UTC on 15.05.2018. The “Day 1-8” stage will provide tokens at a 20% discount (USD 0.068) and there would be no vesting period, or availability cap for the tokens, issued at this stage. Token sale contributors, who pur-chase tokens after the first 8 days of sales, but before the end of the 20 day of the event (i.e. from 09:00am UTC on 23.05.2018 until 09:00am on 04.06.2018) will be able to take advantage of a 15% discount and purchase VRN for 0.072 USD. Similar to the previous stage, there will not be vesting or availability limitations on the funds, issued during this stage.The basic investors’ economy model is very simple. You, as an Investor, will contribute to our ICO campaign in the form of FIAT money. In return you will receive the amount of VRN Tokens corresponding to your investment. We will use the gathered financial resources to develop the Vernam business model. The nature of the VRN and its rate changes will be fundamentally similar with the nature and the rate changes of the stock market share. The better we perform, the more widespread the Vernam core values and service, the higher the exchange rate of the VRN Token. With the growth of our company and Vernam’s implementation in Europe’s insurance sector, the VRN Token’s value will increase very significantly. When that happens, you can exchange your VRN Tokens for FIAT money (USD, EUR, etc.) at any given moment which means you will easily monetize your investment. That is why, to get the most out of the next evolutionary step in Insurance, pay attention to the Token Sale information above. The earlier you get on board, the higher your profit will be! You can expect high profit margins as early as the first months after the ICO campaign is over. The last part of the token sale event, will take place during the final six weeks (from 09:00 UTC on 04.06.2018 until 23:59pm on 15.07.2018). There will be no discount and the cost of 1 VRN during this period will be USD 0.085. However, during this token sale stage, contributors purchasing tokens in excess of ETH 10 (or corresponding amount in other accepted crypto currencies) will enjoy a 10% discount (i.e. USD 0.076 for VRN 1).
USE OF PROCEEDS
Bellow Figure illustrates the allocation of funds, collected during the various stages of the token sale process. 25% of the proceeds are expected to cover the platform development costs (blockchain platform, desktop and mobile clients)
Marketing is a critical element for the platform’s success and “Insurtech” is one of the most expensive industries in terms of marketing costs. We have to ensure that enough funds are allocated to the outreach of local, regional, national and international communities around the world. The marketing budget will be used to create awareness and engagement of the possibilities of our platform. 30% of the token sale funds will be allocated to cover social platform and other marketing channels, including website and content development, the organization of events, etc.
VRN token allocation
Legal and administrative fees will be substantial, given the platform’s target of regis- tering brokers in two EU countries by Q2 2019 and covering 8 countries by the end of 2020. Therefore 25% of the token sale funds will be directed to cover such expenses.
The remaining 20% will be used for network development (i.e. negotiating initial broker collaboration, potential acquisitions and other equipment / physical asset costs).
PROJECT ROADMAP AND MILESTONES
The following graph illustrates the main milestones from Vernam’s development. Con-tingent to reaching the TSE’s minimum cap, the platform development will start on Q2, 2018. This will include blockchain, web and mobile platforms. This stage is expected to finish at the end of the year, and the platform is intended to go live in
Founders joined efforts to change the insurance industry and started building the Vernam concept.
Concept was validated by experienced InsurTech executives, who later joined the team.
Angel investment received, start of platform development
Start of the preparation for a token sale
Listed on an exchange
Vernam platform MVP launch and testing
Vernam broker starting operation in several markets
First CryptoSafe smart contracts signed. Vernam mobile app launch
Development of additional smart contract insurance products
Operating on 8+ key European markets