Digital Asset Insurance in High Demand as Industry Witnesses Exponential Growth

The Intelligent Insurer #54: Mainstream crypto move highlights the growing need for novel insurance solutions

The cryptocurrency industry and its diverse sectors have continued to experience exponential growth in recent times. From increasing regulatory clarity to the influx of large institutional investors, mainstream adoption of crypto is poised to continue and accelerate. This growth, however, has highlighted the need for investors to take proper measures to secure their digital assets.

In this week’s edition of the Intelligent Insurer, we will analyze major developments that are fueling the demand for crypto insurance. We will also spotlight a few solutions that are extremely promising. Before we jump into it though, we’ll bring you some exciting updates from our development team.

Insured Finance software development updates

This week, we are excited to give you a report of some significant progress we have made towards the launch of our mainnet. For starters, we are pleased to announce that we will soon integrate decentralized autonomous organizations (DAOs) from Aragon. Subsequently, we will add support for other DAO platforms.

We have also made massive progress in the claims assessment process, research, and development of the BRD wallet for our users. As our obligation to provide our users with a secure and intuitive experience remains paramount, we have also authorized auditor access to our Github repository. Soon, we will open access for every one of our users. The audit will help us to make adjustments to the platform that suit the needs of our users as we prepare for our mainnet launch.

We remain steadfast in our duty to provide our users with a secure, next-gen digital asset insurance platform and continue to rigorously test it for bugs and improvements. Over the past week, we have made a few bug fixes and feature improvements. Some of them include,

• Making the sidebar open by default
• Closing pop-ups by clicking anywhere outside it on your screen.
• Terms and Conditions pop-ups will now contain a link to redirect users.

Our digital asset insurance platform is primed to provide users with everything they need to become more confident in the security of their digital assets. We continue to make needed improvements to our designs to ensure that user security and convenience are not jeopardized.

Regulatory actions pushing crypto adoption and insurance demands

A few years ago, the little-known cryptocurrency industry was largely considered by regulators and critics across the globe to be a scam, a bubble that was doomed to explode. However, with cryptocurrencies evolving from a little known internet phenomenon to a multi-trillion dollar global market, regulators are quickly exploring ways to regulate them

In one instance, U.S. Congressman, Josh Gottheimer, recently introduced a bill that would establish government-backed insurance for stablecoins. The bill seeks to provide a measure of regulatory clarity for the stablecoin sector of the crypto industry. The increasing involvement of federal regulators in the crypto industry has boosted investors’ confidence in the asset class. Most investors had been holding off on placing their money due to a lack of regulatory clarity.

The International Monetary Fund (IMF) has also opined that global crypto regulations are urgently needed. The financial institution noted that global regulators must work together to create comprehensive, consistent, and coordinated regulations for the rapidly growing industry. All of these moves have increased mainstream adoption and this brings security-related questions.

For instance, the DeFi space is struggling to achieve institutional adoption due to the spate of hacks and thefts that take place. Clearly, an insurance solution that secures investor assets is the need of the hour. Without insurance, the rise of crypto and DeFi will be capped.

Crypto performance further fueling adoption

The performance of crypto assets has attracted the attention of several individual and institutional investors. In 2020, the entire crypto industry was worth a little over $750 billion. However, at its peak in November 2021, the crypto market hit a valuation of nearly $3 trillion. Despite the massive crash earlier this year, the market has rebounded and is currently sitting at $2 trillion.

(Source: CoinMarketCap)

Although cryptocurrencies are still volatile, they are quickly becoming a part of the mainstream economy, instead of a tool for speculators looking for quick profits. MicroStrategy, the highest corporate holder of Bitcoin currently has massive holdings of 125,051 BTC worth over $5 billion in its portfolio. Ever since its initial bitcoin purchase in 2020, MicroStrategy has been making regular purchases of the digital asset.

Banks and many other traditional financial services providers are also taking part. Several top banks worldwide are exploring and investing in digital asset projects. Many of them have launched crypto trading desks for their clients and some have even created their own digital currencies. Recently, Singapore’s largest bank, DBS Bank, revealed plans to roll out a crypto trading desk for retail investors. This latest move comes almost two years after the bank launched a fiat-to-crypto exchange for its institutional clients.

With increasing awareness of the crypto space, an influx of corporate investors, and regulatory clarity, more crypto-focused companies are going public. In April 2021, the leading U.S.-based crypto exchange Coinbase became a publicly-traded company via a direct listing on Nasdaq. Fast forward three months, stablecoin issuer Circle announced plans to go public via a special purpose acquisition company (SPAC).

The increased influx of corporate investors in the space is fueling demand for digital asset insurance products exponentially. Institutional investors typically do not absorb high degrees of risk and the lack of firm asset insurance is hampering further adoption.

Digital asset insurance is the next big thing

Digital asset insurance products and policies are designed to protect investors against unexpected situations, like hacks or theft. Within the relatively short period of its existence, the crypto and DeFi industry has been marred by various cybercrimes. The impressive performance of digital assets in recent years has made them a target for malicious actors. Digital asset insurance provides a measure of protection against casualties resulting from hacks, theft, and more. With insurance, investors can build their fortune without worrying that a single attack will cause them to lose everything.

Crucially, insurance also protects investors from unknown risks that are born from issues such as code vulnerabilities and configuration errors within projects. Spotting these errors requires technical knowledge, something that will severely limit mainstream adoption.

These developments highlight the need for more insurance products like those offered by Insured Finance. With these safeguards in place, users can freely participate in novel markets with the assurance that their funds are protected. As the DeFi and crypto industries continue to grow, insurance is set to be the next step in their evolution.

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.