CRYPTO INSURANCE
Protect Your Crypto Assets
Is crypto way too risky for you? Now you can protect your investments
The world of crypto & DeFi is a very novel space, which is the reason why investors are continuously exposed to cybersecurity risks when using decentralized applications or any kind of smart contract for that matter, unfortunately some protocols will have to be hacked for security to improve in the overall space. Those kind of risks and dangers present a great opportunity to those who know how to take advantage of it, and by “those” I mean all the new projects who are already creating insurance products for DeFi and crypto platforms, some companies even have insurance against market drawdowns of up to 70% or more. And it also presents an opportunity to investors who buy into the tokens which these kind of projects are launching, it is important to mention that since everything is so new, you will probably almost always face some kind of risk while investing in the space.
In 2022 alone over $1.2B in users funds have been lost only due to DeFi applications hacks, this is a reminder that as there is wider adoption into crypto, the number of hacks will increase accordingly too. This happens because as crypto security increases, the tactics and methods of hackers continuously evolve as well.
What do these companies offer exactly?
The insurance business in the crypto space is without a doubt something that is fundamentally important for the ecosystem as a whole and will likely grow tremendously in the coming years. So let’s dive deeper into what these crypto insurance companies can offer and who they are.
Smart contract hacks happen more often than what would expect, for example just in February of this year, a cross-chain application called Wormhole, which is based on the Solana Blockchain, was attacked maliciously resulting in over 300 million dollars stolen from the smart contract vault. Now imagine that you are a user of this Wormhole application and you decided to lock some ether in it in order to get wrapped ether and use it on the Solana blockchain. If you had your ether locked during the attack, you wouldn’t be able to get back your ether since the smart contract wallet that was holding it, got drained. In this specific occasion the Wormhole funds were covered by the team and its backers but this was an exception, usually the projects don’t take responsibility and leave the users helpless. So in our imaginary scenario where you had your funds stolen from Wormhole and their backers didn’t cover the losses, the only way you would be protected is if you had an insurance for smart contract vulnerabilities for this specific platform.
That is one kind of insurance product that these companies are offering to users. There are currently a wide variety of insurance against these type of smart contract hacks. Another great product that they are selling is insurance against stablecoin de-peggs, this kind of insurance has proven to be very valuable after the recent crash of Terra’s UST, Unore.io had one insurance specifically for a UST de-pegg which resulted extremely useful to its buyers.
So we have mentioned now, smart contract exploits and stablecoin de-peggs insurance products but there is also custodian risk insurance, bundled cover insurance, scammer insurance, portfolio devaluation insurance, to even IDO event risk insurance and I’m certain that I’m missing others, the quantity of insurance products that can be created can only grow from here.
Who are they?
Here are some of the insurance providers within the crypto space and their tokens:
- Unore.io (UNO)
- Nsure.network (NSURE)
- Nexusmutual.io (NXM)
- Insuretoken.net (SURE)
- Insurace.io (INSUR)
This is not a financial advice nor am I encouraging anyone to buy these tokens, always do your own research.
