- Decentralized insurance is generating a new wave of interest
- Products in the sector offers protection to crypto holders.
The general belief is that decentralized finance is basically about borrowing and lending. This is not only erroneous but totally wrong. DeFi definitely is more than just borrowing and lending. The entrance and the possible growth of the decentralized insurance could banish that line of thought forever.
Decentralized insurance is a concept in the DeFi sector that looks to offer some sort of protection against risks and threats. Decentralized insurance can overtime prove to be a safety net for the crypto industry.
One of the biggest players in the decentralized insurance sector is Nexus Mutual. Nexus Mutual has witnessed a growth and a surge in the level of interest shown to it. The platform grew from having $4 million in its total value locked (TVL) in July to having very close to $90 million in its TVL by September.
Presently, the platform only provides insurance cover for wallet failures and smart contract. However, the platform has made known its plan to provide everyday insurance policies like the recognised insurance companies.
Nexus Mutual mirrors what is happening in the sector generally. The platform has seen an increased level of interest with many of the platforms in the sector itching to provide conventional everyday insurance.
The wide acceptance and adoption of crypto assets globally would play a massive role in the growth of the sector. Developments made in oracle networks could also spur the growth of the sector further.
How decentralized insurance work
The decentralized insurance give crypto holders a regular source of income. The products on this platform invite crypto holders to their platform and asking them to pool their crypto assets while they would give such holders a share of insurance premium payments.
A product in the sector, Etherisc, is said to operate basically like a traditional insurance.