Today OpenCover emerges from stealth with the first data analytics platform that tracks the burgeoning decentralized finance (DeFi) insurance alternatives industry. With billions of crypto investor dollars frozen or lost due to the recent series of centralized finance failures (e.g. Celsius, BlockFi, and FTX), investors are quickly turning to DeFi insurance alternatives – commonly referred to as DeFi hedging – to protect their investments. OpenCover’s platform is the first to provide investors with standardized, unbiased, real-time data to understand and compare their risk mitigation options.
The problem: fast-growing risks and more than 20 similar insurance products
Although DeFi solves the fundamental custodial, transparency, and auditability issues found in centralized crypto services, it is not without risk.
“Ethics” anything centralized is bad by default, use challenge and self-guard “worked really well this week, but remember it comes with risks too” warns Ethereum founder Vitalik Buterin.
Technical DeFi exploits have cost investors over $3.2 billion in 2022 alone, this figure jumps to over $10 billion when accounting for economic failures such as stablecoin detachments. To fill these gaps, native DeFi insurance alternatives have emerged with the first large-scale multi-vendor payment occurring earlier in May after Terra’s algorithmic stablecoin UST lost its dollar peg. Investors who bought coverage from InsurAce, Unslashed and Risk Harbor were able to recoup more than $14 million.
Unlike traditional insurance, approaches to risk assessment, claims and reporting are highly heterogeneous between coverage providers, making it difficult for investors to understand the options available and to compare different coverage providers. Challenge. Launched by Nexus Mutualthe space has grown from a single player in 2017 to over 25 providers today with over $100 million in coverage sold in the past 30 days.
“The DeFi insurance industry is going to grow massively in the coming years. For perspective, today less than 0.5% of the total value of DeFi is be assuredexplained Morgan Beller, General Partner at NFX, a major investor in OpenCover. “To accompany the maturation of the market, a solution like OpenCover is necessary: a product that provides complete and real-time data on the various insurance offers.”
OpenCover’s solution: standard, unbiased, real-time data to help mitigate risk
As the first platform to collect market and provider level data for DeFi insurance alternatives, OpenCover helps investors understand their options and choose the right products. OpenCover data is compiled directly from on-chain events, smart contract state and transaction traces where access to contract ABIs is possible with third party indexing protocols (e.g. The Graph) used as a backup solution. At the time of writing, OpenCover tracks over 85% of industry activity by total value locked on Ethereum, Polygon, Arbitrum, Optimism, BNB Smart Chain, and Avalanche blockchains.
“What a lot of people don’t realize yet is that ‘your keys, your coins’ also means your risk, and DeFi is still plagued by that.” explained Jeremiah Smith, co-founder and CEO of OpenCover. “We are launching OpenCover to help democratize access to DeFi hedging and ultimately drive the next wave of DeFi adoption.”
OpenCover data is available to investors via a free public dashboard at: https://opencover.com/
OpenCover is the leading platform for analyzing DeFi insurance alternatives. OpenCover provides crypto investors with standardized, unbiased, real-time industry and vendor-level data to help them protect their crypto portfolio on DeFi and centralized exchanges. The company is backed by top Web3 investors including NFX, Village Global, Alliance, Orange DAO, Jump Crypto, Third Kind VC and over a dozen top Web3 Angels. To learn more, visit: https://opencover.com/.
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