Recently, driven by a wave of gains, decentralized insurance related tokens have begun to exert force. Although the market is falling, people have begun to pay attention to the insurance track.
Insurance itself is part of finance. Just like Ping An Bank, it covers various financial products. Insurance is also the most well-known business module.
There are two products that have exploded in decentralized insurance recently, one is Cover Protrocol and the other is Nsure Netowrk. With the surge of major mainstream currencies last month, they have also increased slightly, but the real outbreak is from the beginning of December. Started.
Some people can’t help but wonder, why this round of outbreak is insurance?
Insurance itself has an indispensable factor, and in the face of such a large ups and downs in the currency circle, “the currency circle for a day, the world for a year” is really not a casual blow, but from the current insurance status, DeFi insurance is still in In the very early stage, the scope of protection is only the loss caused by the loopholes of the smart contract itself and a small part of the callback loss. For the time being, it has not been able to attract large funds to really invest in this track.
But just like the content I analyzed before, although lightning loan is a very good tool, the risks caused by hackers cannot be ignored, and insurance has made people discover its indispensability.
As people nowadays common car insurance, accident insurance, health insurance, etc., can play a role at the critical moment.
Today I will use three insurances to analyze the causes and development trends of the outbreak.
The first is Nexus Mutual, which is currently the insurance platform with the largest underwriting amount and the most insured projects in the industry. It is a mutual insurance used to provide risk protection for DeFi products. In other words, you can purchase insurance to reduce the asset loss caused by code defects or hacker attacks on the Ethereum smart contract.
According to DeBank data, Nexus Mutual’s current total lock-up volume has exceeded 89 million. Its model is also the industry’s first. It uses a joint curve model to raise underwriting funds. KYC members can use ETH to purchase NXM tokens through the joint curve model, and the funds for purchasing NXM tokens will be injected into the capital pool.
As for the premium paid by users for purchasing insurance, 50% will be injected into the capital pool, and 50% will be allocated to the insurer. Therefore, the source of Nexus Mutual’s underwriting funds is the funds injected by the purchase of NXM tokens and the funds injected by the premium.
The second is Cover. Because AC announced the merger of Year and Cover on November 28, it attracted widespread attention. The currency price has risen sharply. Since the beginning of December, the highest point has increased by 308%. Paying attention to it can reveal that Cover There are three roles, namely insurance demander, insurance provider and market maker. Cover’s claim process is that Cover token holders can vote to determine the validity of the claim. If it is found to be valid, it will be submitted to the Claim Validity Committee for audit. The committee is composed of professional audit institutions, and the condition for approval is that more than 50% of the audit institutions agree.
The third is Nsure, which has recently been listed on major exchanges and has seen large increases that have made people pay attention to it. It is like an insurance company governed by Nsure mortgage users. Nsure distributes personal risk transfer to the entire community, enabling people to obtain risk protection in an open financial world. Nsure holders can choose different items to pledge and get 50% of the premium income. The insurable amount is twice the value of Nsure, and a single item can insure up to 25% of the insurable amount.
Now that the DeFi wave is resurgence, there are only 4 insurance items from DeBank, and insurance accounts for less than 1% of the DeFi market. The main reason is that it is like insurance in early life, and it is still groping. Settlement, the demand has not yet reached a certain scale, it is impossible to be so comprehensive.
However, in the future market environment, there may still be better quality projects to solve the current problems. This is the case for DeFi and the same for stablecoins. Why is insurance impossible?
I think the insurance can be subdivided into corporate insurance, personal insurance, and further subdivided into contract insurance, fall insurance, etc., and claims funds can be subdivided into a set of models. The existing ones are not the most complete. But the type of outbreak will eventually begin one day.
