DeFi TVL Surges Past $200B But Only 2% is Insured

The Intelligent Insurer #55: High yield opportunities in DeFi attract a larger audience and reinforce the need for insurance.

Insured Finance software development update

We made significant progress this past week thanks to stellar efforts from our dev team. We continued executing tasks in preparation of our mainnet release. Following last week’s audit and fixes based on feedback, we executed the following tasks:

  • We prepped our smart contract scripts for mainnet deployment
  • Retrieved API provider URL from the Polygon Mainnet network
  • Set up Polygon network on hardhat config
  • Optimized our smart contract functionality

The DeFi explosion

DeFi protocols seek to address specific pain points in the traditional finance sector. Due to the massive benefits they provide to users, the DeFi space exploded in popularity in 2020. An increasing number of investors began speculating on this nascent industry, pushing the total value locked (TVL) in DeFi assets over the $1 billion mark early in 2020. Before the end of the year, TVL exceeded $20 billion, its then all-time high (ATH).

Investors face varied security risks

One of the risks that DeFi investors face is rug pulls. The perpetrators of this criminal act drive attention to their DeFi projects thereby attracting liquidity from several unsuspecting victims. Subsequently, they remove all users’ liquidity from the platform, leaving investors with worthless tokens. Earlier in December 2021, the Avalanche blockchain experienced the largest ever rug pull in its history. Developers of the Shiba Inu competitor, SnowdogDAO, pulled $30 million out of the project.

More room for growth

The DeFi industry is still in the early stages of its development. Although it has achieved a lot over the past three years of the market’s existence, there is still enough room for growth. Between February 2020 and February 2022, it has gone from having a TVL of $1 billion to over $195 billion.

About Insured Finance

Insured Finance is a decentralized, peer-to-peer insurance marketplace. Users can request customized insurance on a wide variety of digital assets, thereby ensuring full protection. Those fulfilling requests can earn premiums and earn a competitive return on their capital. Claims are fully collateralized and settled instantly.

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A decentralized P2P insurance marketplace with easy claims and instant payouts. Powered by Polkadot.

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Insured Finance

A decentralized P2P insurance marketplace with easy claims and instant payouts. Powered by Polkadot.