ISM price
insurance platform
Free trade, free claim
ISM price insurance platform
Free trade
CLAIM and UNCLAIM represent the rights owned by the insured and the insurer, and the rights can be freely traded through DEX.
Free claim
When the user has CLAIM, the user can make a claim at any time before the expiration of the protection period, and the insured can operate more freely.
Mint Fee Mining
Users can earn ISM mining rewards by depositing CLAIM and UNCLAIM by staking stablecoins.
Decentralized Autonomous Organization
ISM does not belong to a company, and all decisions such as adding or deleting insurance types, insurance claims, and other parameter design are determined by community voting.
Team
Bryan
Founder&CEO
Daniel
Co-founder&CTO
Tommy
Co-founder&CMO
Economic Model
In effect, the claim is equivalent of an American put option with a strike price specified by the insurer at the time s/he stakes in on the platform. It is a put option because a holder of the claim can exercise the option by selling some tokens to the insurer at the strike price. The fact that the option holder can sell it anytime before expiration date suggests that it is an American instead of an European option.
There are multiple methods of pricing American options. It is well-known in the mathemat- ical finance literature that American options do not have a closed-form solution. Researchers and practitioners can at best approximate the price.
The most popular numerical methods to evaluate American options include the method based on the celerated Black-Scholes formula and Monte Carlo. Here, we provide an example of the insurance claim and the pricing of the claim based on either methods.
The Black-Scholes PDE for American option is given by:
Solving for the formula under the boundary condition for the American put option:
