DeFi Insurance in the digital age
DeFi protocols offer millions of people worldwide access to financial tools that they may not have through using traditional finance. However, the emergence of decentralised finance solutions has been accompanied by an increase in cyber risks in the form of hacks and other breaches of security. According to BBC, losses from fraud in the Defi sector hit an all-time high of $474m in the first seven months of 2021.
These hacks largely stem from the nascent nature of the DeFi industry. Consequently, the industry unsurprisingly carries inherent risk, where there is a lack of regulated resources to govern proceedings. However, this trend is changing, and many companies are becoming increasingly aware of the importance of providing insurance for assets in the DeFi space.
What is DeFi insurance?
Decentralised Finance (DeFi) as a concept utilises blockchain technology. In contrast to other traditional financial bodies, DeFi solutions are not controlled or regulated by a single, central source. The decentralised aspect is essential to a DeFi business model as centralised regulation can often limit the efficiency of a protocol — a centralised system is less transparent and has more control over users’ assets.
The importance of DeFi insurance is monumental. Assets in the DeFi space inherently have more risks that people may want protection against. DeFi insurance thus provides a valuable hedge against the threats attached to digital investments.
CoverCompared and DeFi Insurance
Our vision at CoverCompared is to give the power back to the people by lowering insurance policies and coverage’s transactional and administrative costs. Additionally, we aim to offer high value cost-effective traditional and crypto insurance products and provide users the option to buy all insurance products (including Traditional) using a host of cryptocurrencies. Soon our users will receive global access to purchase innovative insurance products through our one-stop-shop marketplace.
CoverCompared is the First DeFi insurance marketplace for the global crypto ecosystem. We aim to lower transactional and administrative costs of insurance policies and coverage while providing high-value, cost-effective insurance products bought using a host of cryptocurrencies.
Our platform will be connecting users with multinational insurance providers for all global insurance products such as crypto-related protection, health, life, and travel policies. The platform will include a frictionless insurance marketplace experience that incorporates next-generation blockchain technology and tokenized incentives.