DeFi Insurance is a practice or arrangement by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. (https://defiprime.com/insurance)
Decentralized Insurance Platforms
Generally speaking, decentralized insurance acts as a safety net for the DeFi ecosystem. From wallet insurance to smart contract insurance, the comfort of knowing that your assets are protected in the case of a bug or a hack creates peace of mind for crypto investors.
Over the past decade, we’ve seen countless instances of crypto investors mishandling their private keys and numerous exchange hacks, ultimately resulting in the loss of billions in investor capital. Moreover, many smart contracts in existence today, especially DeFi-based contracts, are valuing storing contracts that could be vulnerable to manipulation through loopholes. The most widely known instance of a hacked value storing contract was the DAO hack back in 2016.
While insurance is not commonly mentioned throughout the DeFi community, it is one sector that has a massive potential to provide investor protection and confidence. Legacy insurance is a multi-trillion dollar industry with many shady or unethical players. The transparency and trustless nature of decentralized networks and DeFi is a perfect fit to disrupt the incumbent industry. In the end, decentralized insurance protocols will democratize the power of insurance and return to its historic roots of acting as society’s safety net. (https://defirate.com/insurance/)
The insurance industry has developed over time from a community-based model to an adversarial
one where large institutions dominate. It is also inefficient in many areas leading to large frictional
costs being borne by customers. Blockchain technology allows individuals to efficiently transact
directly with each other and therefore enables the core insurance entity to be replaced. Nexus
Mutual uses blockchain technology to bring the mutual ethos back to insurance by creating aligned
incentives through smart contract code on the Ethereum blockchain. (https://nexusmutual.io/assets/docs/nmx_white_paperv2_3.pdf)
Etherisc is building a platform for decentralized insurance applications. With visionaries
like you, we can create a platform full of opportunities across the industry’s value chain.
Corporates, large and small, not-for-profit groups and insurtech startups can all come
together to provide better products and services. We aim to use blockchain technology
to help make the purchase and sale of insurance more efficient, enable lower
operational costs, provide greater transparency into the industry and democratize
access to reinsurance investments.
VouchForMe is built on a premise that insurance can be tailored to each individual.
We are creating an ecosystem where the opinion of the community counts as risk
assessment for an individual who in return benefits from a lower cost of insurance.
We simplify the risk assessment and segmentation for insurance companies while
creating favorable insurance solutions for end customers. Whether it is a car,
home, or business insurance, we have you covered. (https://vouchforme.co/about/)