From Principal-Protected Notes to Smart Contract Insurance, what exactly is Websea planning next?

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Websea is building the first Contract Insurance, reshaping the Web3 transaction security paradigm.

Source: Websea

Many people think that the high returns in the crypto market are exciting. However, we have seen too many real users who come to earn money but leave because of liquidation. We often say "only invest what you can afford to lose," but when the market is highly volatile and a black swan event occurs, the one who faces all the consequences is the ordinary person sitting in front of the screen, wiped out overnight. You can say they don't understand risk management, or you can say this is the law of the jungle in the crypto market.

In fact, "risk" has never been an assumption but a reality that traders must constantly face. In traditional finance, there is insurance; in the Web3 world, Websea provides users with the same level of protection logic. If risk aversion and copy trading solve the "dare to try for the first time" issue, then contract insurance aims to address the "can I start over after failure" problem. This is not just the result of product stacking but also the core value that Websea has always adhered to: "Make transactions in the crypto world easier for everyone."

Original Intention: Mitigate Ordinary Users' Trading Anxiety through Mechanization

In most crypto trading platforms, users bear all the risk in contract trading. Although the platforms provide tools like take profit, stop-loss, and leverage selection, such risk control measures mainly rely on users' own operational judgment and do not provide "systematic risk support" from the platform level.

Specifically, the typical problems in the current crypto derivatives market include:

1. Liquidation leads to an exit: A single misjudgment or extreme market volatility can result in a total loss of assets;

2. High entry barrier for novice traders: Market volatility requires risk control expertise;

3. Lack of compensatory mechanisms in the market: Most trading platforms do not have compensation measures in case of trade failures;

4. Single platform incentive mechanism: Focused on returns, lacking risk control value orientation.

Against this backdrop, Websea decided to start from a mechanistic level and launch the Capital-Protection Copy Trading product. By using the margin from Capital-Protection Copy Traders to compensate for the principal loss, the platform aims to reduce the risk and entry barrier for users participating in copy trading. After the product launch, the user transaction conversion rate significantly increased, especially showing stronger positive feedback in terms of retaining new users. This validation phase laid a solid foundation for Websea's derivative product innovation.

Evolution: From "Single Transaction Stop-Loss" to "Building a System-Level Risk Buffer Pool"

As the platform's user trading behavior becomes more active, Websea began to consider: can we continuously provide risk mitigation for users throughout the entire trading lifecycle? In traditional finance, insurance mechanisms are widely used to mitigate losses from uncontrollable events; in the crypto derivatives field, the absence of similar structural protection mechanisms has kept users in a state of extreme risk exposure. In June 2025, Websea officially launched Contract Insurance, the world's first systematic security solution in the global crypto trading field based on a "premium payment - insurance node generation - installment payout" model.

What are the advantages of Websea Contract Insurance?

1. Risk Buffer Mechanism for a More Secure Transaction

During intense market fluctuations leading to order losses, the Websea Contract Insurance can trigger system compensation, effectively buffering the losses, establishing a safety net for traders, and reducing systemic risk.

2. Reduced Trial-and-Error Costs for Newbie-Friendly Experience

Even in the case of misjudging the market pace, there is an opportunity to receive compensation. This fault-tolerant mechanism provides traders with a relaxed growth space, helping to build trading confidence, steadily enhance practical skills.

3. Improved Psychological Stability to Focus on Strategy Execution

With risk protection in place, traders are no longer driven by fear and emotions in their judgment, allowing them to execute strategies more calmly and rationally, deal with market fluctuations calmly, and truly seize market opportunities.

4. Transparent Mechanism with Clear and Traceable Compensation Rules

The entire process of Websea Contract Insurance, including premium deductions, insurance node generation, and compensation process, is visible, ensuring that users have a full understanding of fund flows and compensation pace.

What is the core mechanism of Websea Contract Insurance?

After users transfer funds to the insurance account and activate the insurance switch, the system will deduct a $10 premium for every $100 cumulative loss, generating 1 insurance node. The node will take effect after 72 hours and participate in future compensation.

The contract insurance adopts a two-way payment model, where regardless of profit or loss, the system will charge a 10% premium based on the profit or loss amount, deducted from both the contract account and the insurance account. Contract orders and normal copy trading orders can participate in insurance, while break-even copy trading orders do not participate.

In addition, users can earn reward nodes by inviting others to generate nodes. When the insurance pool reaches the payout threshold, an airdrop will be automatically triggered. After node activation, users can manually claim the airdrop compensation from the insurance pool, achieving sustainable risk coverage. The individual node compensation period is 100 cycles.

Websea Contract Insurance vs Normal Contract Trading vs Copy Trading vs Break-Even Copy Trading

In the highly volatile crypto market, risk control ability determines a trader's long-term success rate. From risk assessment, loss protection, subscription fees, and compensation methods to profit ranges and referral rewards, Websea Contract Insurance has achieved substantial evolution. The specific comparisons are as follows:

Redefining the Boundary of Crypto Derivatives Trading Tools

In fact, crypto derivatives trading is not unsuitable for the general public, but rather, in the absence of safeguard mechanisms, its risk cost far exceeds users' risk tolerance. Since its inception, Websea has been aware that if we hope for Web3 transactions to truly reach the masses, we must restructure transaction security mechanisms, provide practical risk protection solutions, and move from the popular break-even copy trading across the entire network to today's contract insurance. Websea is not only launching product features but is also constructing a future-oriented risk mitigation system. Websea's product roadmap follows three main directions:

1. Starting from user pain points: incorporating the issues real traders face into the original product design;

2. Mechanism-level solutions: addressing risk control challenges through systematic structural design (rather than temporary subsidies);

3. Long-termism perspective: prioritizing user lifecycle and ecosystem sustainability over short-term transaction fees.

Websea hopes that before the next cycle arrives, users will no longer be mere gamblers but risk managers with systemic protection and strategic space. In the future, Websea will continue to expand the extension functions of contract insurance, developing a risk management solution that covers the entire lifecycle. Amidst the storm, Websea will continue to build a fundamental security support system for Web3 traders.