Traditional Insurance is one of the oldest businesses in the world that has helped to maintain the stability of stock markets, giving peace of mind to investors and owners knowing that their funds are protected in case of an unexpected occurrence.
But it has its faults. One of them is that there’s no transparency in how they calculate premiums and rates, and another is that they can take a very long time to pay out on claims, often leaving the burden on the claimant.
DeFi provides transparency in its transactions by the blockchain. Meaning that you can verify all movement of assets immediately. And, of course, it is faster and easier to calculate all claims in case of an attack and make the payments to those who are eligible.
The DeFi market has exploded in recent years, and as a result, there are more investors, more risks, and therefore a greater need for DeFi Insurance. Over the last few years, there have been a large number of hacks and cyber attacks within the crypto industry. Too many to even confirm a specific number. These violations, such as smart-contract and exchange hackings, have led to a huge loss of investor funds. Just take a look at the astonishing number of hacks that were reported last month (June Hacks 2022).
As a result of the consistency of these hacks, the demand for DeFi insurance is ever-increasing. DeFi Insurance protocols have emerged such as InsurAce.io, to provide robust, flexible and reliable protection against such risks.
In essence, the biggest benefit is the protection against these attacks and that additional level of security for all DeFi users. The fact that this is all done with the power of blockchain and the openness that comes with it is another benefit that no traditional insurance product can currently offer.
DeFi Insurance eliminates the issues of opacity and unnecessary delays, as we explained before, allowing the underwriters to directly view the current risk exposure levels, and investors to protect their assets quickly, as well as get paid out much faster in the unfortunate event of a claim.
Additionally, to all the advantages previously mentioned, DeFi insurance often doesn’t require KYC, meaning that your privacy is preserved.
The list of benefits of DeFi insurance over Traditional Insurance goes on and on, and we are working on our v2 to provide our investors and customers improved protection and to allow them to be well on their way to securing their crypto journey.
We are here to make crypto safer. Stay tuned with us and be the first to know all the new features we are planning to provide to our customers! Stay Safe. Stay with us.
