DeFi insurance grew in 2022 to include nearly two dozen providers
Last year was a pivotal year for decentralized finance (DeFi), especially in the insurance sector, with $34.4 million paid out in DeFi claims, a new report suggests.
Overall, across the industry in 2022, on-chain DeFi insurance providers sold 19,839 policies, with 552 claims and 379 payments made to date. According to data published on March 20 through OpenCover, reports.
Over the past 9 months, the organization has tracked 3,434 cover purchases, made 80 new claims and 234 payments as demand increased after notable events in cryptocurrencies such as the FTX crash. I was.
According to the report, the primary attack vectors include protocol logic and infrastructure, responsible for 78% of losses.
However, this amount is small compared to the estimated $3.8 billion lost to various exploits and hacks last year. Still, new data suggests that DeFi insurance could be a trend worth watching.
Despite a significant increase in demand for DeFi insurance, only 151,000 Ether ($231 million) worth of active risk cover is underwritten, leaving $48 billion in total value (TVL) locked in DeFi. constitutes just 0.5%, the report said.
Additionally, the report also states that over the past nine months, the value of potential claims has decreased by 44% and 58% on a USD and ETH basis, respectively. DeFi is happening more frequently and causing more economic damage.
Guarantees bigger exploits
Targeted attacks appear to be on the rise across cryptocurrencies, led by claims stemming from the TerraUSD (UST) and FTX collapses, with the DeFi insurance industry claiming a record $34.4M in 2022. , the report found.
According to the report, insurance can protect users from risks beyond their control with indemnifications that cover losses from hacks and other vulnerabilities.
Full report data available herewas based on a consortium of industry DeFi insurance providers including Nexus Mutual, Unslashed Finance, InsurAce, Chainproof, Sherlock, Neptune Mutual, Risk Harbor, InsureDAO and Ease.