# Pricing Model

**Crypto Price Cover Pricing Model**

Since insurance is in effect options and hence, the insurance premium can be calculated using Monte Carlo method. In the risk-free environment, suppose the underlying asset price follows geometric Brownian motion:

In the discrete-time form, μ is the expected return, and σ is its standard deviation and follows a standard normal distribution.Following the Taylor expansion, we can find the price path of the insurance premium:

Since

We have

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