Crypto Insurance Coverage: InsurAce Review 2022
Insurance is a sign of viability and an additional reason to believe in a project. Everyone talks about it. According to Dyma Budorin, CEO and Co-founder of Hacken, “Insurance is becoming a big thing.” CER.live independent researchers use insurance as one of the criteria for assessing the level of cybersecurity of crypto exchanges and cryptocurrencies. The biggest insurance companies in the world, companies having 600 billion dollars under their management, believe that the next logical thing for Web3 cybersecurity firms is to add this type of coverage on top of their audits. Indeed, insurance can complement smart contracts and provide clients with insurance.
Most products have traditionally addressed legal liability, but what about crypto-specific insurance cases? What should market players do to shield their portfolios from data breaches and bank runs? They can buy insurance coverage, provided by companies like InsurAce, Solace.fi, Atomica, Amulet Protocol, Nexus Mutual, etc. In this article, let’s review InsurAce – a rising provider of Web3 insurance products.
How big is InsurAce
InsurAce Overview
Founded in 2021, InsurAce provides insurance coverage for hedging the risks of smart contract exploits and stablecoin de-pegs. The active cover amount is $15.2 million, while the total cover amount is $350.5 million. It supports 3 CEXs and 140 protocols, including Aura Finance, Compound, and Aave.
Talking about statistics, the most important figure is the total amount paid in claims. To this day, InsurAce has paid over $13 million. This figure is quite impressive relative to its active cover of $15 million. This includes the largest payout in crypto insurance history of $11.7m to investors affected by the $UST De-Peg event in May 2022.
InsurAce users buy various insurance products available in the app. These so-called stakers act as underwriters. Their funds make up the shared pool. Unlike traditional insurance, crypto insurance rewards underwriters for their contribution to the shared pool. That’s why InsurAce users can also have a return on their stake.
InsurAce offers coverage for two broad categories of risks: smart contract exploits and stablecoin de-peg. It hedges the most widespread smart contract vulnerabilities that lead to exploits, such as reentrancy or math or arithmetic errors. The provider also has options for covering custodian and stablecoin de-peg risks. After an insurance event, users can submit a claim and receive reimbursement for loss if eligible.
InsurAce Strengths
InsurAce is different from other insurance providers because it supports more diverse protocols and covers the stablecoin de-peg risk. Let’s review these and some other strengths.
Integration with CER.live
InsurAce is integrated with CER.live data. Each insurance product has its security rating taken directly from CER.live. For example, USDC De-Deg product offers a security rating of A, while Ola Finance product has a security rating of B. Having a reliable and objective security rating for each insurance product is vital for investor decision-making.
Support of multi-chains
With InsurAce, you can get coverage for protocols in a wide range of chains, including Ethereum, BSC, Polygon, Avalanche, Solana, Arbitrum, Fantom, Gnosis, Moonriver, Celo, Harmony, Boba, Cronos, ICON, Ontology, Moonbeam, Bifrost, Aurora, Optimism, Metis.
Stablecoin de-peg coverage
What’s special about InsurAce is the coverage of stablecoin de-peg risk. For example, it offers stablecoin de-peg covers for USDC and BUSD. InsurAce also offers attractive bundled covers, but all of them are currently sold out. This feature is a point of differentiation as many other insurers don’t offer it.
Custom cover
Users who wish to have their own customized bundle of protocols covered and purchase at least $500,000 in coverage amount are free to apply at Custom Bundled Cover Request.
Reliable and transparent
The reliability and trustworthiness of the insurer are vital if you expect to get your damages covered. After all, the insurance is only as strong as its provider. InsurAce is a partner with Hacken, a leading Web3 cybersecurity auditor. Partnership with Hacken gives extra assurance that InsurAce can be trusted. On top of that, InsurAce is quite transparent about its business. It has public documentation, whitepaper, and good statistics.
Disadvantages
If we talk about strengths, we also have to mention weaknesses. InsurAce has somewhat become a victim of its own success. The thing is, the most lucrative offers are often unavailable because they are sold out real fast. It takes much time and funding to refill the supply. However, InsurAce understands this problem and introduces new products to the market. Just recently, the app launched new covers for Stader, Compound V3, USDC De-Peg, Ola Finance, Hubble, and Aura Finance. Still, the major point for those interested in purchasing products from InsurAce is not to wait too long.
To sum up, crypto insurance is a viable option for Web3 projects. An adequate insurance cover by a reliable provider will save your project from losses due to smart contract exploits or extreme market volatility. All in all, InsurAce gives you the power to explore DeFi without the worry of getting wrecked.
