Tuyanto: Cryptocoin Insurance

About Project Cryptocoin Insurance

Options are a financial derivative sold by an option writer to an option buyer. The contract offers the buyer the right, but not the obligation, to buy (call option) or sell (put option) the underlying asset at an agreed-upon price during a certain period of time or on a specific date. The agreed upon price is called the strike price. There are many option types. One options can be exercised any time before the expiration date of the option, while other options can only be exercised on the expiration date (exercise date). Exercising means utilizing the right to buy or the sell the underlying security.

Sound so difficult! That’s why this project is divided in two parts: option exchange and insurance company:

Traders and hedge funds conclude deals on purchase and sale of stock options
Other clients, who don’t want to know how option works can purchase insurance for growing or fall of the main cryptocurrencies.

Cryptocoin Insurance has two main sources of income

Option Exchange

The profit is generated as a trade commission from each operation on purchasing or selling options. It is 0.5% per transaction or 1% per circle for each of the transaction parties.

Taking into account the volatility of options and huge opportunities for profit, this commission is not significant for market participants. However, it allows the exchange to earn a high income as compared to usual cryptocurrency exchanges due to the total lack of competition. In case of competitors in the future, the amount of the exchange commission can be proportionally reduced.

Insurance Company

The income is generated by selling cryptocurrency growth/decline insurances.

Problem:

There is no solution to insure the deposit in Bitcoin or Ethereum from falling.

At the same time in this market there is increased volatility that makes people be afraid to store large funds in the cryptocurrency. On the other hand, large companies are slow to enter the market (for example,to accept payments in a cryptocurrency) for the same reason.
There is no special cryptocurrency exchange where you can buy/sell options.

The main fear of creating such stock exchange is the increased volatility, too. It seems to everyone who deals with options for stocks, oil or wheat that the risks are enormous.
There is still no short selling opportunity in the cryptocurrency market.

Nobody can sell a cryptocurrency that is physically absent on the account within a short period of time. This reduces the speculators’ ability to smooth price fluctuations in other markets. In its turn it causes the volatility increase and consequences enumerated in cl. 1 and 2 above.

Solution:

CRYPTOCOIN INSURANCE allows you to insure price falls or growth risks for major cryptocurrencies.
CRYPTOCOIN INSURANCE creates the first option exchange.
Options enable short sales.

How It Works

The price of any option at a particular moment of time is under the influence of supply and demand and is constantly changing. Buyers of options risk only the amount spent to buy the option, for example, $ 100. They cannot lose more under any other circumstances. The option seller theoretically carries an unlimited risk associated with the change in the price of the basic asset (Bitcoin or Ethereum). That is why each sale of the option comes with a guarantee security (GS).

The guarantee security is the amount (margin) the exchange requires as a guarantee of the options seller to meet his obligations. GS is established by the exchange in a fixed amount as on a certain date and for one option contract. The GS value is indicated in the specification of this contract.

By selling an option, the seller immediately obtains the premium paid by the option buyer. The exchange freezes a part of the funds on the seller’s deposit until the transaction is executed or the position by the option is closed. GS may change as soon as the volatility of the basic asset increases/decreases.

If the price of the basic asset moves against the seller, he must make additional collateral if he is going to continue to hold this option or sell it. This process is regulated by the exchange in an automatic mode. If the options seller does

not have enough money on his account, the exchange will automatically liquidate this option position.

The exchange sets a limit on the maximum number of options that can be taken on one side of the market. This protects the exchange from the situations when due to the strong market movement to one direction, it cannot quickly close options of the sellers whose deposits fall below the GS.

CCIN Token

CCIN tokens will be placed during the ICO. Their total number is strictly fixed. All tokens that are not redeemed during the placement will be destroyed. They will never be issued additionally. They will be placed by using the Ethereum smart contract. The fixed number of CCIN tokens guarantees their buyers the increase in their value as the exchange earnings grow. Tokens will be introduced to the cryptocurrency exchanges within 30 days after the end of the ICO.

The CRYPTOCOIN INSURANCE Company has developed a simple and understandable model for the increase in the CCIN token value. 30% of each commission obtained by the option exchange will be directed to the liquidity fund. Within the next month CRYPTOCOIN INSURANCE sends these funds to purchase CCIN tokens from the market and burns them.

ICO Structure

Price of tokens: 3,000 CCIN tokens = 1 ETH

Date of ICO: November 1, 2018 - December 27, 2018

Minimum collection amount: $0.5 M

ICO main target: $5 М

Maximum collection amount: $10 M