Adventurers in what is perhaps the most lucrative and risky corner of the cryptocurrency world are starting to see a bit of a safety net.
In the past year, scores of investors big and small have poured billions into decentralized-finance applications that allow users to lend, borrow and trade crypto without intermediaries like banks. While the DeFi sector is booming, it has also been plagued by hacks, fraud and a copy-and-paste coding culture where a modified app can siphon away users from an established rival.
Now software developers are launching products that claim to reduce the risks by selling something akin to insurance coverage. But here’s the catch: They’re also DeFi apps.
Unlike insurance offered through the likes of Lloyd’s to custodians and large crypto exchanges, these apps — which run on digital ledgers called blockchains — let any investor buy coverage. They also allow anyone to form investment pools to provide coverage — often promising annual returns of at least 50%.
New Cover Purchased!
Cover ID: 3683
Project: Keeper DAO
Cover Amount (USD): $150,150.00
Cover Amount (ETH/DAI): 150,000.0 DAI
Start Date: 2021-03-25
Expiration Date: 2021-04-24
More info: https://t.co/Rf3jaJTObF
— Nexus Mutual Bot (@NexusMutualBot)