# Crypto Factor Insurance

**Asset Backing** - sometimes called Baseline Price Insurance is a service designed to provide an asset-backed baseline price for a token independent of its market price. The asset-backing ensures that the baseline price can only increase and tokens can be exchanged for part of the asset-backing at any time. 

<figure><img src="https://1186599547-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvXh4igq8WcPa3ojldilw%2Fuploads%2Fk3AaHEHZDvCyiIa7UtXt%2FScreenshot%202024-04-12%20at%2020.54.41.png?alt=media&#x26;token=142ce190-34a6-4db8-9702-9efa90c7702b" alt=""><figcaption></figcaption></figure>

<figure><img src="https://1186599547-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvXh4igq8WcPa3ojldilw%2Fuploads%2FJDYvPKqgpRQ9ejos9cHJ%2FScreenshot%202024-04-12%20at%2020.55.04.png?alt=media&#x26;token=aba1ad65-810d-4a1d-b199-2658281e3f50" alt=""><figcaption></figcaption></figure>

**If the market price gets lower than the baseline price, an arbitrage opportunity occurs** where users can buy tokens from the DEX (as an example) and exchange them for assets from asset-backing. This arbitrage trade can be executed until the market price with fees is greater or equal to the baseline price.&#x20;

Asset Backing DAPP

On the Crypto Factor DAPP you will find the Asset Backing Tab. On this application you can find in one place a number of key operational metrics and the SWAP function.

<mark style="color:red;">IT IS EXTREMELY IMPORTANT TO NOTE THAT ASSET BACKING IS A FEATURE THAT ALLOWS FOR A PROFITABLE SWAP DURING ADVERSE CONDITIONS. THE SWAP FROM CFR TO DFI AT THE BASELINE PRICE SHOULD BE REVIEWED CAREFULLY BEFORE YOU SWAP AS THERE MAYBE A BETTER PRICE THAT EXISTS ON THE OPEN MARKET.</mark>

### Operational metrics form you will find:

<mark style="color:blue;">**Asset Backing Balance:**</mark> The total amount of $DFI that is currently backing $CFR. This balance is incremented automatically on every buy/sell of $CFR as per the tokenomics set out in our whitepaper. This balance only goes up.

<mark style="color:blue;">**Asset Backing Base Price:**</mark> The current price that can be claimed via swap. This is the Asset Backing Balance / CFR Circulating Supply minus any pending CFR->DFI automated swap processing. (CFR->DFI conversion occurs via automated routine at regular intervals).

<mark style="color:blue;">**CFR Circulating Supply:**</mark> The amount of $CFR which is circulating. This is depleted when $CFR is burnt as part of the swap process. This balance only goes down.

<mark style="color:blue;">**CFR Burnt Amount:**</mark> The amount of $CFR that has been burnt as part of the Asset Backing swapping. This balance only goes up and when combined with the CFR Circulating Supply = the Total Supply of 100m.

### Swap form you will find:

Your Wallet Balance and the amount of $CFR that is available for swap. The available $CFR = the Asset Backing Balance from the operational metrics form.

A $CFR token input (with %) to enable the amount of $CFR to be specified for swap, together with the Swap Button.

### Performance metrics form you will find:&#x20;

<mark style="color:blue;">**Metrics - CFR Market Price:**</mark> The current live price according to the DMC DEX.

<mark style="color:blue;">**Metrics - CFR Baseline Price:**</mark> The swap price available (as above 'Asset Backing Base Price'

<mark style="color:blue;">**Percentage:**</mark> The CFR Baseline Price / CFR Market Price which provides an indication of what percentage the $CFR token is backed.

<mark style="color:blue;">**Chart:**</mark> The chart provided the above metrics in chart form with three timing ranges to scale the charts. The charting feature is used as a quick reference as to the health and progress of the backing.

### Developments Expected for Crypto Factor Asset Backing:

* Crypto Factor Phase 1 Asset-Backing uses $DFI for backing
* Crypto Factor Phase 2 Asset-Backing can uses $DUSD for backing
* Crypto Factor Phase 3 Asset-Backing will introduce a multi-token blended backing
* Crypto Factor Clients will be required to hold at least 20% of their Asset-Backing in $CFR

Open DApps Cloud designed and built this product and in collaboration with Crypto Factor will be developing this feature in a robust service to meet our client insurance needs.

For a more detailed explainer ODA have prepared an article including the complex maths behind this here on Mirror:

[![](https://mirror.xyz/favicon.ico)Baseline Price Insurance Service for Tokens on OpenDApps Cloud —…](https://mirror.xyz/0x95297b3A42991F16D09cBbC73aec12160A999250/6fD0XesiGF0VqwJOGFfYbja8E4L5HFrNUBfm-8f0CQE)