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Armor Finance – Making DeFi Safer

Jan 29, 2021 ·

By Jose Maria Macedo, and Yan Liberman, CFA, CAIA

Co-hosts Jose Maria Macedo and Yan Liberman sit down with Azeem and Robert from Armor Finance. Armor Finance is a new project building a smart insurance aggregator for DeFi. Armor seeks to make DeFi safer by streamlining the insurance UX, providing a ‘Pay as you Go’ and ‘Only pay what you owe’ coverage for users across various protocols, starting with the majors but expanding coverage over time. We see them as the insurance “distribution” layer on top of the “underwriting” layer provided by NXM, similar to insurance brokers in the real world. Armor just launched their first products and yield farming initiatives this weekend and Yan and Jose take this opportunity to dig into what Armor is and their future plans. We hope you enjoy this conversation.

The full interview transcript is available below!

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Music Attribution:

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Interview Transcript

Jose (00:17):

(music) Hi, I’m Jose Maria Macedo, a partner at Delphi Digital, I’ll be co-hosting episodes of the Delphi podcast with a broad focus on economics, governance and incentives. With our guests, I’ll explore different, sometimes radical economic perspectives and how these affect what we value as a society and how we organize ourselves to achieve it. Ultimately, my goal with these conversations is to expand our perspectives in ways that allow us to build better systems going forward. As a reminder, nothing said on this podcast is a solicitation to buy or sell any security or token, or to make any financial decisions, I or Delphi Ventures may hold tokens mentioned on this podcast, and you can see our show notes for a full disclaimer. First, a quick word from our sponsors before we dive in

Jose (01:09):

Today I am thrilled to be joined by my co-host Yan Lieberman, as we speak to Azeem and Robert from Armor Finance. Armor is a smart insurance aggregator for DeFi, seeking to make DeFi safer by streamlining the insurance user experience. They provide a pay as you go and only pay what you owe coverage for users across various protocols, starting with the majors, but expanding coverage over time. We see them as the insurance distribution layer on top of the underwriting layer provided by Nexus Mutual and others. Similar to insurance brokers in the real world, Armour just launched their first products in yield farming initiatives this weekend. And so we take this opportunity to dig into what Armor is and their future plans. We hope you enjoy this conversation. As a disclaimer, Delphi Ventures is an investor in both Nexus Mutual and Armor. Nothing in this podcast is investment advice.

Jose (01:58):

All right. Thanks very much for being here Azeem and Robert.

Robert (02:01):

Absolutely. Thanks for having us.

Azeem (02:02):

Thank you very much.

Jose (02:04):

Could you give us some quick background on who you are and how you got here, how you found crypto?

Azeem (02:09):

Sure. I’m a lifelong entrepreneur, just bootstrapping businesses since quite a young age, and I’ve developed an expertise in product development growth and cashflow for e-commerce and software businesses. And so I’m most comfortable running entirely remote globally distributed teams with lean yet effective infrastructure and operations.

Jose (02:30):

Awesome. What about you, Robert?

Robert (02:34):

I have a background in entrepreneurship to some degree, a pretty good background in crypto at this point. Got into this space in around 2011, been interested since then. Since 2017, I guess I’ve been doing Ethereum development full-time, worked with a bunch of different companies, ICO’s random contracting work. Got specifically into security research for a while doing bug bounties. Most recently was making a smart contract security monitoring company.

Azeem (03:11):

And also, Robert recently won Solidity’s 2020 contest. So he won first place, which was very impressive.

Jose (03:21):


Robert (03:22):

Thank you.

Jose (03:23):

Cool. Yeah, that’s interesting. Could you tell us a little bit about what Armor is, why you started it, and what problem you’re trying to solve?

Azeem (03:31):

So Armor started because as a highly active user of the best DeFi products and protocols with an interest in covering my assets against smart contract risks, the solutions at the time were a bit too involved despite the innovations that were being produced. I knew that I didn’t want to actively have to manage my coverage, I wanted to just pay for it and not thinking about it anymore. And through research, I noticed a number of unproductively deployed assets solving pieces of the puzzle with respect to insurance solutions for the marketplace. They were solving these pieces individually, and I noticed that they could potentially be combined into the ideal user experience to the best of its ability today, and integrated henceforth into tools that users already use to minimize the friction and maximize reach of these insurance solutions.

Yan (04:25):

And just in terms of, what do you think some of the largest pain points that existed, and how are you guys going about addressing them?

Azeem (04:34):

Ultimately, a user who wants coverage for their assets should not have to think about it. It should be one step for them to know that their assets are covered against small contract risks. And so that was the end user experience I wanted to design, and all the other complexity that would deliver that experience to the end user should be abstracted away, and effectively hidden under the hood of the system. So what might for the user be a one-click or a one-step experience to cover all the assets? May be quite complex, and it’s our responsibility to make that an easy and simple experience for the end user.

Robert (05:20):

And not to mention, well even further than just convenience. There’s a lot of extra money being spent by people who buy a year of coverage at this much Ether, and then don’t end up using that much Ether or coverage for that long. So with Armor, you pay as you go and only pay for exactly what you need covered. And that could save users money in addition to just being much more convenient for them.

Jose (05:48):

Yeah, this is a huge use case for us, and something we’ve been harping on for a while. The DeFi UX, as a user, most users don’t know where their capsule’s going to be next week, let alone next month or next year. I think a user experience like this where you pay as you go and it’s streamed cover, and no KIC, et cetera, streamlines that quite a lot.

Azeem (06:10):

Yes. This is actually a very important point, because Armor will often save users a lot of money by preventing this wasted time and expenditure around their coverage. And in a space as dynamic and fast moving as DeFi, where opportunities arise all the time, you might have your Ether in one lending platform and then another opportunity comes up you remove it somewhere else. So maybe you take it out and you want LP to Uniswap, or SushiSwap, or something else entirely, right? Or you want to take your dollars and you put them into Curb and LP with stable coins, et cetera, et cetera. There are all these things that have a high variance in their returns for users, or in their utilities. So insurance solutions that are available in the space, they need to be able to match and keep up with that king of pace.

Jose (06:59):

For sure. Yeah. And obviously you’re right now that’s not the case, right? You have to manage your expirees, and then you have to try and sell it if you can, and probably not. And just end up not using it. So, could you talk a bit about what the UX is going to be like for both the supply side user and a demand side user? Just to give an idea for people what they can expect the product to look like.

Azeem (07:21):

Sure. On the supply side we have developed the two core products. We have an R-NXM vault with the R-NXM token, which is a yield bearing vault token. Users would be able to deposit their W-NXM or NXM tokens from Nexus Mutual. Which represent, I believe, essentially they represent a share of the capital pool that Nexus Mutual has, which is denominated in Ether. And so that capital pool is used to provide coverage to whatever protocols users want their coverage on. So Armor takes these tokens, unwraps them, sticks them into Nexus Mutual to expand the cover capacity, and then automatically manages the staking, unstaking, re-staking, and allocation of coverage capacity to protocols where the demand is there, or the capacity is there for a yield to be sustainably generated. And so the user, in return for the positing the NXM tokens receive the R-NXM yield bearing token.

Azeem (08:27):

So the R-NXM token is meant to be a complete replacement for W-NXM, or unutilized NXM on the market, so that they’re all productively deployed and generating a return for users. And the R-NXM token will accrue value over time through the activities of the vault. So this becomes streamlined in a permissionless way for users to use the Nexus Mutual platform to earn a yield by providing coverage to the end users of the Armor protocol who want coverage, while also helping expand capacity. And ultimately our goal is to expand the reach of DeFi as a whole, by helping users have this experience where they can feel protected and that their assets are safe from smart contract risks. That’s one product, by the way. Then we have the… Do you have any questions about that, by the way? I’m more than happy to elaborate, or we can move on.

Yan (09:27):

Yeah. And just, I think it makes a lot of sense. And one aspect that I was hoping to get a bit of clarity on is the decision-making process going forward. I know you guys mentioned that you have some names that you’re going to be staking to original some of the more well-known Blue-Chip contracts. So I was wondering, how the decision-making process going forward, and how’s that expected to play out?

Azeem (09:49):

Sure. So we’re starting with the capacity being increased across 10 of the biggest DeFi protocols, simply because nothing exists that is able to serve that capacity today. And so these protocols are Uniswap, SushiSwap, Badger, Aave, Compound, MakerDAO, Curve, Yearn, Balancer, and RenVM. So we’re focused on this at the moment with the V1 product suite. And then V2, which is coming in two or three months, will implement a more complex staking pattern, which would allow coverage expansion to smaller protocols depending on demand. And the DAO would be deciding what the allocation looks like. And there have been some great suggestions so far in the community.

Robert (10:30):

And we’re actually, I mean, I guess, running into a very good problem right now. Because our contract is taking so much in Nexus, there’s a point where it won’t actually end up adding coverage. Right now we’re having to figure out, I guess, how to add stake to different contracts as opposed to the ones we’ve already added to. We’re not expecting it, but we have to switch that around because there’s been too much stake AR-NXM right now.

Jose (10:58):

Makes sense. And Azeem, I know you were going to run through the rest of the products. Do you want to keep doing that, going through the … Nice.

Azeem (11:06):

So the next product, and these are all things that are being released over the next three to four weeks, by the way. It’s such a complex and deeply thought through system that it requires us to phase the rollout into these four phases that I’m describing. We have four phases for the rollout, however, I’m just describing each product to you one by one. Okay? So the next product is the RNFT, which is an NFT rapper for tokenized mixed mutual coverage. So what people are able to do, is when we expand the coverage capacity in Nexus Mutual, the Nexus Mutual system is set up so that the premiums that are required to be paid for the coverage are paid upfront for whatever the period is. So we’re able to tokenize that coverage and then allow users to mint the coverage.

Azeem (11:53):

So they pay the premiums to Nexus Mutual, and then they take the tokens and they deposit it into our NFT staking pool. Where then our system, the protocol, will broker it through to end users in the Smart Cover System and the shield, or the Armored vaults. Okay? So what we’re doing is, were innovating on the level of somebody else effectively pays for the coverage to Nexus Mutual, with respect to the premiums. And then they have an opportunity to earn a yield on top of that by having it then brokered through us. And this is an important point because ultimately the other Blue-Chip DeFi protocols, such as Uniswap, SushiSwap, Compound, Aave, Curve, and Synthetics, they achieve their goal through the creation of permissionless pooled resource markets that are powered with decentralized governance. And so we recognize that asset coverage is a quite complex problem, and it requires a dynamic and adaptable approach to connect coverage capacity with user demand.

Azeem (12:54):

And effectively, the two key constraints that we’re solving here with these products I’m about to describe to you, they are coverage capacity and coverage demand. Right? Neither of which can actually sustainably increase without the other. So considering the complexity involved, Armor is effectively willing to work with any competitive insurance innovations with a suitable level of quality, and will be able to aggregate and bring to market a pooled and permissionless solutions that will be powered with simple and easy user experiences. So this is important to understand, because we’re effectively building streamlined parts and less friction on the demand and the supply side. So now that that’s covered, I would like to explain the demand side solutions for end users. If you have other questions, first of all, you’re welcome to put them forth.

Jose (13:51):

No, that was great.

Yan (13:52):

Yeah, I was just going to say the same thing. I would love to hear the demand side solutions you were going to describe.

Azeem (13:57):

Great. The first product on the demand side is the Smart Cover System. What it is, is a dynamic dashboard that will automatically track your assets as they’re moving around various protocols. And it allows you to receive a quote based on a combination of the assets that you have. Will be able to match it to the coverage capacity available within our pools, and recommend you a combination of coverage. Which you can then approve with one transaction, and it will then stop automatically billing you. Effectively, it’s an on-demand, pays you go coverage solution for end users. Like I said, you approve it one time and that’s it, it will just automatically stream your billing by the second according to whatever the quoted coverage quote is. Again, based on the combination of your assets.

Azeem (14:54):

Initially it’s launching on the Armor website, on the Armor DAP, and this allows permissionless access and no need to prepay for more clunky solutions with fixed durations and fixed protocol exposure. Is simply streamed-based on the length of coverage you need based on whatever your asset combination or your portfolio looks like at the time. And once we’ve refined the experience on the DAP, our number one priority is to integrate it with other dashboard solutions for users already in the market where users are already comfortable using those products. For example, you have Zapper, you have DeBank, you also have Zerion that it would seek to integrate with them along with any other solutions that appear during this time. So that’s the Smart Cover System. Any questions about that before I describe the Armored vaults?

Yan (15:50):

Just a quick question there, Nexus Mutual is the one who underwrites a lot of the risk, or all the risk effectively. I was wondering how the claims process would play out for users that have an event that they think would grant them payback for the cover they purchase.

Robert (16:09):

Yeah, I can explain that if you guys can hear me. So first, the DAO would have to vote on a hack happening on a certain protocol at a certain time. Once that happens, the NFTs will be submitted to Nexus. And if they’re approved, users can just simply click the claim button and they’ll be sent back funds. So all users really have to do, click the claim button next to their coverage.

Yan (16:41):

Got it.

Jose (16:42):

Yeah, go ahead Azeem on the Armored vaults I think would be cool to hear about that now.

Azeem (16:46):

Great. So what we’ve developed are Armored vaults. What these are, if you look at the dashboards on Uniswap info or SushiSwap’s website, or Balancer has pools vision, there’s a number of things out there. So what it will usually show you is based on the trading volume you are able to generate fees from the transactions. Right? And these fees are paid out to the liquidity providers to these pools. So what we’ve discovered is, since the return on these liquidity provision opportunities for asset owners are quite good. They’re, in fact, high enough to be able to offer a unique solution, which is the Armored vault. With the Armored vault you’d be able to deposit your LP tokens for a variety of protocols.

Azeem (17:48):

I described to you earlier, we’re covering stuff like Uniswap, SushiSwap, Badger, Aave, Compound, MakerDAO, Curve, Yearn, Balancer, RenVM. Now, I’m not saying we’ll be able to cover all of that on day one, however, you would eventually be able to deposit your LP tokens. And what it will do is, since you’re generating yield from the transaction fees, the protocol, when your LP token is deposited in the vault, it will bill your LP tokens for the premium required to pay for your coverage that you need. So it will demand no money up front, it will depend no deposits. It will simply hold your LP tokens and bill that directly without requiring you to manage it at all beyond that. So it’s an extremely simple experience for users who want exposure to liquidity provision opportunities while also ensuring that their assets are automatically covered.

Azeem (18:45):

And I have a strong hunch that this is going to gain the biggest adoption in this space with respect to insurance products. And so with the Smart Cover System and the Armored vaults, I believe we are able to cover the wider space with respect to where users are and where the opportunities are to provide coverage to users. And, of course, as we release these products, as we test them with end users, and as we receive feedback, we get to develop. We notice opportunities, we develop insights, and using that we focus on rapidly continuing to innovate and expand the reach that we have with our products over time.

Jose (19:37):

That’s really cool. Yeah. And I mean, with those Armored vaults and the insured LP shares, do you see those becoming prime DeFi collateral? In this era of smart assets, do you see these kind of insured LP shares eventually being something that you can get leverage on and incorporate it into other protocols?

Azeem (19:56):

Ideally. Yes.

Jose (19:57):

Yep. That’s fair. And in terms of, how should people think about you? I’ve heard you referred to as an insurance aggregator. Is there an equivalent in the real world? Because obviously you’re not doing the underwriting yourselves, you’re not like an insurance protocol, you’re not competing with Nexus. How would you say the best way for people to think about you is?

Azeem (20:16):

Sure. Actually, rather than the physical world, I believe the best comparison for Armor would be the other Blue-Chip DeFi protocols such as Uniswap, SushiSwap, Compound, Aave, Curve, Synthetics and some others who achieve their goals through the creation of permissionless pooled resource markets powered with decentralized governance. So launch Armor is a decentralized insurance brokerage. And we have a strong focus on collaboration over competition. And the reason why, is because we recognize that asset coverage is a quite complex problem, and it requires a dynamic and adaptable approach to connect coverage capacity with user demand. And the two key constraints for insurance products… So coverage capacity and user demand are the two key constraints for insurance products to reach a wider market. And neither of these can actually sustainably increase without the other.

Azeem (21:09):

And this is why Armor will work with any competitive insurance innovations with a suitable level of quality to aggregate and bring to market these pooled and permissionless solutions powered with simple and easy user experiences. Which abstract the complexity under the hood to fill unmet demand with respect to buyers who require coverage. And right now we’re built entirely on coverage. And of course, we do plan to integrate any other solutions that are appropriate. So you may ask, what other projects we may look to integrate next as an insurance aggregator. However, at this time, nothing else is as well developed enough to be competitive at all with Nexus Mutual. So that’s where we are at the moment.

Jose (21:53):

That makes sense. Yeah, that was my next question. And, do you think it’s possible that you’ll ever integrate with centralized insurance solutions as well? Would they have to, I guess, tokenize and be in some sense trustless?

Azeem (22:05):

Well, yes. I am discretely watching a few projects aiming to bridge this as they develop. It could definitely be a solid opportunity to open up capacity. And of course, wherever they falter, we’ll seek to provide value by unlocking and streamlining the experience for end users.

Robert (22:22):

And you know frankly. Our new mission is to make investing in DeFi as safe as possible. We want to do anything to make that happen, whether it’s directly insurance or not in the future.

Yan (22:40):

Got it. No, that makes a lot of sense. And now that we’ve gone through the products and then some of the vision, we’d love to hear more about the Armor token and how it’s integrated and how it captures value.

Azeem (22:51):

Sure, sure. With respect to how Armor captures value, look, to solve this complex space, several loops have to be architected, built, and effectively solved around increasing capacity and then generating demand to fill the capacity sustainably. Which is a real issue with insurance products. So Armor first creates value that did not already exist with resources and assets that were otherwise unproductively deployed. And then Armor, of course, the DAO seeks to accrue a management or a brokerage fee, depending on what the activity is with respect to the product lines in play. And these may range from 2.5 to 20%, depending on the situation. And of course this is all subject to governance through the DAO.

Yan (23:44):

Got it. And so what are the, I guess, initial release plans? And how are you targeting incentives to help bootstrapping the liquidity in terms of the NFTs, and just the user base in general?

Azeem (23:58):

Well, that’s actually really quite complex, and I might end up going for half an hour. We’ve definitely got a lot of material that people can read about that. And ultimately, look, over time… I think what’s important to think about is that over time we will develop a number of moats and network effects, and this is done through the production of growth loops that solve the two key constraints that we previously mentioned. And so these will be developed and tested using appropriately adjusted token incentives to discover and refine the experience for network participants on both the demand and the supply side. And so this is really subject to whatever the situation demands and/or shows us. And based on the experimentation and the results and the insights that we gleaned from the results, we’ll be able to refine this over time. And what’s really important, is eventually would be able to scale the right combination of the product suite without requiring token incentives for end users, so that it would be able to sustain itself.

Jose (25:17):

That’s fair. And what’s the premium on the value capture starting at right now? And how do you see that… I guess, what do you see that as being sustainable in the longterm in terms of your longterm pricing power?

Azeem (25:29):

Okay, well, with respect to pricing power, while it matters, the focus is really on the two key constraints, which are coverage capacity and coverage demand. And wherever there is an effective opportunity to bridge the two constraints together to unlock value, we’re going to be there. Okay? So, given the access that we have with respect to being able to leverage the resources that Nexus Mutual has already developed, and this is why I mentioned they are the most well-developed product in the space as an underwriter. We’re not too concerned with this at the moment, because we are going to continue working closely with them to develop the offering over time. So I believe that as long as we really stick to our strengths.

Azeem (26:13):

And considering Armor is already the largest staker of NXM with Nexus Mutual by far, we have the opportunity to collaborate and develop superior solutions over time. And this is all thanks to what I consider really amazing about DeFi, which are the opportunities for composability. And this is incredible at unlocking value for users. So as time passes, we will continually seek to increase the value for users, whether it’s pricing power or user experience or whatever it takes to bridge the gap between coverage capacity and coverage demand.

Jose (26:52):

Yeah, that makes sense. So it’s whenever there’s a mismatch between cover capacity and cover demand, you see yourselves as coming in and being able to bridge that, to link one up with the other.

Azeem (27:04):


Jose (27:05):

Have you thought about, I guess this is plays into your experience with entrepreneurship and with growth, but have you thought about the cost of customer acquisition there? I know initially there’s a lot of low hanging fruit in terms of integrating with protocols and stuff like that. And that’s the majority, I guess, of the business development work you’ll be doing. Or is there something else.

Azeem (27:22):

Well, that’s actually quite interesting topic, because I’ve given this a lot of thought in recent months. In that I’ve noticed that in non-crypto, non-DeFi space, a lot of products effectively have to pay rent to Google and Facebook, for example, for access to customers. Okay? Whether it’s Google or Facebook or traditional advertising mediums, most of the money goes into that, and then hopefully to make a profit on the margin between the revenue and the situation where the majority of their expenditure is on marketing and advertising. What I’ve noticed here in this space is that tokens that are distributed through these distribution events, they are effectively not paying rent to the middleman that may be Facebook and Google.

Azeem (28:17):

Instead, they’re paying their users directly. And if it’s well designed, the system of token distribution can be used to train or educate users to use your product correctly. Because when a user sees a gain personally with respect to the participation with a product, then they will be motivated to figure things out. And of course, every little helps in the user experience, and the guides and everything that are offered, because you still need to maximize the conversion rate of viewers into actual participants in the protocol. However, this is how I see it. This is still paid advertising, or paid user acquisition, except that you’re not paying Facebook or Google anymore you’re paying the user.

Jose (29:05):

Yeah, that’s super interesting. And so I guess you see yourselves as being, or as facilitating that distribution platform for projects to pay their users? Or, where do you see your role there?

Azeem (29:16):

Right now, we’re just experimenting.

Jose (29:19):

That’s fair. And in terms of decentralized insurance, right now it’s primarily focused on smart contract insurance. How do you see this evolving? Are you seeing any products that you like? I mean, there’s been a few people experimenting with impermanent loss insurance, there’s economic risk insurance in terms of Aave. How are you seeing insurance progressing?

Azeem (29:38):

Sure. As I mentioned, wherever there is demand and supply… Look, at our key focus is on two topics, right? One is expanding the ability for DeFi as a whole to extend its width and depth in market reach. And the other is that in order to expand the reach of DeFi as a whole, there are two key constraints to solve with respect to insurance solutions, which are coverage demand and coverage supply. So as long as we stay focused on that, and make sure that when we develop products they are put out, they’re optimized, and then they’re also assigned dedicated team members to continually maintain and test and improve them over time. The C-team that created what we have in front of us right now, we’ll be able to lift our heads up and look around and see what else is out there, and see how else we can meet the requirements for these two key areas of focus, which are expanding DeFi through the expansion of constraints around coverage supply and coverage demand.

Azeem (30:52):

Overall, it’s actually quite simple when you think about it, because then we don’t have to be attached to whatever the product is right now. We’re always looking to how we can improve that for users on the supply and demand side over time.

Robert (31:04):

Yeah, no, as I mentioned earlier, I mean, or our core mission is to make investing in DeFi as safe as possible. So any insurance that’s around we’ll absolutely want to use as long as it’ll make things safer, and as long as it’ll make more people use DeFi.

Azeem (31:24):

As an aggregator, we’ll find a way.

Yan (31:27):

And just another question here. I think your role, especially in terms of the synergies you provide to Nexus are pretty clear with the fact that they’re still getting the exact same report of Nexus Mutual, that Mutual is receiving the exact same fees it would normally receive if it sold to cover directly. And the service that you’re providing ends up being on top. And so in that sense, you guys are very synergistic. Do you see yourselves ever going lower down the stack into the underwriting arena? Or do you think you’ll mostly exist here?

Azeem (32:02):

Well, considering Armor is already the largest staker NXM with Nexus Mutual, we technically already are underwriting risk through what I see as effectively a permissionless resource acquisition, despite separate brands. And this is what I find amazing about DeFi, because this opportunity for composability and to deeply integrate within other resources that already exist in the space is incredible at enabling anybody to unlock value for users where there previously was not.

Yan (32:30):

Got it. That makes sense.

Jose (32:33):

Do you see, I guess, eventually even as insurance spills into the real world, we’re already kind seeing that with Nexus in terms of offering centralized exchange, like custody insurance, and then eventually real world insurance, like Armor continuing to provide that role as the distribution platform for Nexus and eventually for any others that launch?

Azeem (32:54):

Yes. So with respect to the custodial coverage, we haven’t looked at that. However, we’ve definitely paid attention to the centralized exchange coverage. Because, for example, Coinbase and finance, they have API access. So it would be an interesting experiment to allow users to connect to their accounts through Armor using the API. It should just be a one-click approval. And that way Armour would be able to read the user’s balances and just view them. And based on that recommend, again, a combination of coverage. So it would effectively be an improvement to the Smart Cover System that we are already about to release.

Jose (33:40):

Yeah, that’s really cool.

Robert (33:42):

And that’s sort of the brilliant thing of being an aggregator is that we’re not restricted to a certain protocol that may be able to ensure this, but not that. That we can just aggregate any protocol that would be able to ensure anything. So I envision ourselves being able to pretty much ensure anything other DeFi companies can insure.

Azeem (34:03):

Exactly. Again, always with the focus of making DeFi safer for users. And thereby, as a result, expanding the reach of DeFi, as a whole expanding the market.

Jose (34:13):

Yeah. That makes total sense. And in terms of, what do we say is the biggest risk to Armor’s vision? I mean, what are the things that keep you up at night that you most worry about?

Azeem (34:25):

Well, the nice thing is that things keep me up every night, and then the next day we deal with it. So, I think we’re pretty good at that so far.

Jose (34:40):


Robert (34:41):

For me, what I’m looking into, I don’t know if I would say it keeps me up at night. But I do think the future of DeFi insurance is really protocols and assuring their own users. And I think easy ways to do that, simple ways that protocols can actually manage to pay for, I think that’s extremely important.

Azeem (35:03):

Yeah. We are exploring a few things that are very much in stealth mode at the moment, so we’ll leave that there for the time being.

Yan (35:13):

Got it. And just, to follow up slightly on that, do you expect in the long run for your primary user to be a protocol, or do you think end users will come to you guys directly? I guess the largest share of your-

Azeem (35:31):

We do have end users as recipients of the coverage, we also see protocols as with SPS, or coverage. Effectively, the end users would be very satisfied with the Smart Cover System. With respect to protocols, initially, we’re starting with just users using the Armored vaults directly. And then this is something that I would very much like to do, which is just allow protocols to directly integrate our Armored vaults into their user interfaces. And that would effectively achieve that goal.

Yan (36:10):

Yeah. No, that makes a lot of sense. In particular, being able to leverage the dynamic terms that you guys have on your insurance, where the pay as you go streaming model really enables that.

Azeem (36:20):

Exactly. And the sequence or the process of what this would look like would effectively be running these products on the Armor DAP, and then integrating these experiences into dashboards. And then once we’ve covered that, then we can start on the path of integrating directly with the protocols too.

Jose (36:44):

Yeah, that’s super interesting. Well, we really appreciate your time. Is there anything that we haven’t covered that you’d like to touch on?

Azeem (36:52):

I think this has been a very good discussion. And, again, I really appreciate you taking the opportunity, you actually making the opportunity for me to answer you in the first place, because it’s allowed me to clarify or solidify some important thoughts with respect to where Armor is and where it’s going.

Jose (37:08):

Awesome. Yeah. We really appreciate your time. And yeah, thanks very much for all the great answers, and best of luck with everything. Where can people follow you, before we go?

Azeem (37:17):

You can just type into your address bar, and then scroll down to the footer to see where you can reach it.

Show Notes:

(2:03) – Azeem and Robert’s background and what brought them to crypto.

(3:24) – What is Armor?

(7:08) – Armor UX:

Next Products:

(10:58) – 1. arNFT.

(13:56) – 2. Smart Cover System.

(16:41) – 3. Armor Vaults.

(19:36) – Thoughts on Armor Vaults and LP shares becoming prime DeFi collateral and their incorporation into other protocols.

(20:15) – How to think about Armor

(22:10) – Integrating with Centralized Insurance Solutions.

(22:57) – Armor Token value capture.

(25:34) – Long term pricing power.

(27:20) – Thoughts on the Cost of Customer Acquisition.

(29:35) – Thoughts on Decentralized Insurance.

(31:42) – Thoughts on underwriting risks.

(32:47) – Custodial Coverage.

(34:30) – Biggest risks to Armor’s Vision.

(35:28) – Expectations for Armor’s primary users.

(37:27) – Where to find Armor Finance.