The Market For Crypto Insurances Is Huge

According to a crypto insurance executive, the $2 billion loss in decentralized finance this year shows just how big the market is for crypto insurance companies.
 The Market For Crypto Insurances Is Huge
READING NOW The Market For Crypto Insurances Is Huge

According to a crypto insurance executive, the $2 billion loss in decentralized finance this year shows just how big the market is for crypto insurance companies.

Only 1% of all crypto investments are insured.

Inequality Between Locked Crypto Asset and Insured Assets

Speaking to Cointelegraph, Dan Thomson, CMO of decentralized protection protocol InsurAce, said that there is a large disparity between the total value (TVL) locked in crypto and decentralized finance (DeFi) protocols and the percentage of this TVL under insurance:

“DeFi insurance is a sleeping giant. With less than 1 percent of all cryptocurrencies covered and less than 3 percent of DeFi covered, there is still potentially huge market opportunity.”

Despite a lot of investment in smart contract security audits, on-chain insurance is a system that serves as a viable solution for digital asset protection, such as leveraging a smart contract or compromising the front end of a Web3 protocol.

The collapse of Terra (LUNA) and the resulting Terra USD peg provide an instructive example of how in-chain insurance can protect investors, Thompson says. He adds that InsurAce “paid $11.7 million to the 155 affected UST victims.”

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