DeFi Insurance Claims Reach $34.4 Million

The decentralized finance (DeFi) industry has seen remarkable growth in recent years, with more than $160 billion in total value locked in various protocols and applications as of March 2023. However, this rapid growth also brings increased risks, such as smart contract bugs, hacks, and market volatility. To mitigate these risks, several DeFi insurance companies have emerged in the past few years, offering coverage for various types of losses and damages.

According to a recent report by OpenCover, a DeFi analytics firm, DeFi insurance companies paid out $34.4 million in claims in 2022, a significant increase from previous years. In comparison, only $36.9 million of such claims have been paid out since OpenCover began tracking the data. The report noted that notable payouts included $22.5 million during the collapse of the Terra Luna ecosystem in May 2022 and $4.7 million from the collapse of crypto exchange FTX in November 2022.

DeFi insurance coverage has expanded to eight major categories, including protocol loss coverage, stablecoin depeg coverage, yield token coverage, custodial account coverage, audit (smart contract bug) coverage, slashing coverage for professional validators, and other customized coverage. The report also highlighted that in the past nine months, the mean daily leverage ratio of active policy amount to underwriting capital was 1.07 times across different providers.

However, despite the growth of the DeFi insurance industry, the report also pointed out that more needs to be done regarding the ability to scale. “Ultimately, scaling these innovations to a meaningful size will depend on the robustness of DeFi risk assessment frameworks — of which there are currently very few,” the report stated.

At the time of writing, the total value of underwriting capital pools tracked by OpenCover amounts to $286 million (186k ETH) with a low of $210 million and a high of $394 million in the last nine months. However, the current value is 26% lower than the period maximum in USD terms, indicating that there may be some market volatility and uncertainty in the DeFi insurance sector.

In conclusion, the DeFi insurance industry has come a long way in providing coverage for various risks and losses in the DeFi ecosystem. However, as the DeFi industry continues to grow and evolve, there is a need for more robust risk assessment frameworks and better scalability solutions to support the long-term sustainability of the sector.


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UAE Gets First Blockchain-Powered Solution to Acceletrate Motor Insurance Claims

To tackle the decades-old industry challenge of reconciling motor recovery claims, XA Group has rolled out the first ‘Made in the UAE’ end-to-end and blockchain-based digital solution dubbed Addenda, according to local media outlet Khaleej Times. 

The blockchain-powered solution has already been adopted by leading insurers in the United Arab Emirates (UAE), such as Oriental Insurance Company, Emirates Insurance Company, Yas Takaful, and Abu Dhabi National Insurance Company.

Therefore, this signals the industry’s appetite for digitalization and transparency. Per the announcement:

“Addenda offers a live and shared view of policy data and documentation among insurers, providing visibility into the extensive approval and reconciliation process that takes place during motor recovery claims.”

XA Group is a UAE-based global provider of automotive aftermarket services, and it has gone the extra mile of presenting Addenda in Arabic to support regional insurers whose language of operation is Arabic.

Mina Sahib, the Insurance Business Director for MENA at XA Group, pointed out:

“We understand the challenges insurers face and the major financial burden posed on them due to the heavily decentralized and paper-based nature of the reconciliation process.”

She added:

Decentralization often means insurance companies are unable to fully identify the reasons behind outstanding claims and therefore, they are not able to reconcile their financials with other insurers.”

Addenda is a platform that makes communication and documentation seamless and paperless about motor claim recoveries among insurance firms, according to Sahib. 

Paul McLeod, the Chief Operating Officer at Emirates Insurance, stated:

“Exchanging recovery payments is a very big challenge to the industry. I think this is a small step for some of the leading firms in the industry to come together and start working as a group in a collaborative way.”

Meanwhile, Dubai seeks to render creative solutions and improve people’s lives by positioning itself as the global capital of Web3, Blockchain.News reported.

Image source: Shutterstock


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Zetrix Announces Launch of NFT-based Insurance Product Covinsure

Public blockchain network Zetrix announced the launch of Covinsure, a non-fungible token (NFT)-based insurance product. - 2022-06-02T160250.354.jpg

According to Zetrix, Covinsure will provide insurance by using blockchain technology and cryptocurrency as a payout. Zetrix has made it easier for users to be insured as the only requirements are their passport and a Zetrix wallet.

The Layer 1 public blockchain network facilitates smart contracts and delivers privacy, security and scalability.

The announcement added that purchasing the Convisure Covid-19 insurance requires only US$1 or 1 USDT and the coverage is valid for up to 1 year.

The NFTs are minted through environmentally-friendly options. The energy utilised to mint NFTs is 100,000 times lower compared to the conventional option of the Ethereum blockchain. Hence, the lower energy required to mint these NFTs has reduced the gas fees of Zetrix-based NFTs.

Zetrix-based NFT was first available for trade on NFT marketplace Pangolin in April, according to Blockchain.News.

NFT Pangolin is a global marketplace for regional creators mainly in Asia to issue and sell their unique crypto secured assets to collectors.

Zetrix also provides connectivity to China and its fundamental infrastructure. It launched its main net on April 15, which seamlessly integrates with the Xinghuo Blockchain International Supernode – China’s largest national-level blockchain network, led by the China Academy of Information and Communications Technology. 

Image source: Shutterstock


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Lemonade to Offer Blockchain-Powered Climate Insurance for Farmers in Emerging Markets

Lemonade, a top American insurance company, has revealed the formation of the Lemonade Crypto Climate Coalition meant to offer blockchain-enabled climate insurance to the most vulnerable farmers across the globe.

Through its nonprofit organization dubbed the Lemonade Foundation, Lemonade has partnered with other companies like Chainlink, Avalanche, DAOstack, Hannover Re,, Pula, and Etherisc as founding coalition members.

Based on the Lemonade Foundation’s objective of rendering environmental and social change through technology, the coalition is being established as a Decentralized Autonomous Organization (DAO) to create and distribute parametric and instantaneous weather insurance to livestock keepers and subsistence farmers in emerging markets. 

The climate insurance will be developed on Avalanche’s proof of stake (PoS) as a stablecoin-denominated decentralized application (dapp). 

With the initial rollout expected in Africa this year, farmers will have the ability to make and receive payments using local currencies or stablecoins. 

Daniel Schreiber, a director at the Lemonade Foundation, welcomed the collaboration and stated:

“By using a DAO instead of a traditional insurance company, smart contracts instead of insurance policies, and oracles instead of claims professionals, we expect to harness the communal and decentralized aspects of web3 and real-time weather data to deliver affordable and instantaneous climate insurance to the people who need it most.”

With Africa having nearly 300 million smallholder farmers who face real climate risks, Rose Goslinga believes blockchain-powered climate insurance will come in handy in safeguarding their livelihoods.

The co-founder of Kenya-based insurtech Pula added:

“This is where the power of the Lemonade Crypto Climate Coalition comes in: An on-chain solution that can be immediately impactful at scale will allow farmers to finally get financially protected against the increasingly frequent risks such as drought.”

Blockchain is emerging as one of the sought-after technologies for tackling climate change. For instance, Samsung Electronics announced plans to utilize blockchain in a climate-focused reafforestation program in Madagascar earlier this year. 

Image source: Shutterstock


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Binance user protection insurance fund reaches $1B valuation

Binance, the world’s leading crypto exchange by trading volume, announced its Secure Asset Fund for Users (SAFU) reached a $1 billion valuation.

The user protection insurance fund was set up in July 2018 to protect users’ interests. Binance committed a portion of the trading fee towards SAFU and began allocating 10% towards the funds. The crypto exchange also revealed the two wallet addresses where the funds are being held in order to ensure transparency. The two wallets contain a billion-dollar worth of crypto in BUSD, BNB and BTC.

Changpeng Zhao, the CEO of Binance, urged other crypto platforms to follow on their footpath and reveal the details of their emergency insurance funds as well. He said, doing so would make them more transparent and also help them showcase their commitment to regulators.

Responding to the queries from Cointelegraph, a Binance spokesperson revealed that the SAFU is meant to protect users’ interests and funds are used at Binance’s discretion. He went on to add that SAFU is focused on, but not limited to He explained:

“The purpose of SAFU is to protect Binance users and we reserve the right to cover issues outside of if required.”

In the absence of clear regulations, crypto investors and traders in many countries are solely dependent on crypto exchanges’ security measures to safeguard their funds. However, some of the most notable crypto platforms have been hacked despite the promised security, with millions in user funds getting lost. Thus, the role of user insurance funds becomes very critical.

Related: The biggest crypto heists of all time

While decentralized exchanges and protocols have been the primary target of hackers for the ease of heist, however, that doesn’t make centralized exchanges any safer. Earlier this month, one of the suffered a $33 million reported loss after a hacker managed to siphon funds from 483 user accounts. The crypto platform claimed it had compensated users who lost their funds.