Some examples of DeFi Insurance
Continuously in the last two posts I am explaining DeFi insurance and their types. Today in this post and this is the last post in this topic I would like to share some examples of decentralised finance insurance. Several DeFi insurance protocols and platforms offer insurance products and services to users within the DeFi system. Let's explore some of those.
a. Nexus Mutual
Nexus Mutual is a leading DeFi insurance platform. This insurance covers various protocols and assets. Users can purchase cover by staking NXM tokens as collateral here. In return users will receive coverage against smart contract exploits and hacks. Nexus Mutual operates as a decentralized mutual insurance platform.
Example:
Samim deposits her assets into a DeFi protocol and purchases smart contract cover from Nexus Mutual. If the protocol experiences a smart contract exploit resulting in asset loss, Samim can file a claim with Nexus Mutual and receive compensation for her losses, subject to the terms and conditions of the policy.
b. Cover Protocol
Cover Protocol is another decentralized insurance marketplace. Here users can purchase cover for various risks within the DeFi system. Users can buy cover tokens (e.g., CLAIM) to insure their assets against smart contract vulnerabilities and protocol failures. Cover Protocol operates as a peer-to-peer insurance marketplace.
Example:
Jewel wants to insure his assets deposited into a decentralized lending protocol against smart contract risks. He purchases cover tokens from Cover Protocol and locks them as collateral to provide liquidity to the insurance pool. In return, Jewel receives coverage for his assets and earns premiums from other users purchasing cover.
c. Unslashed Finance
Unslashed Finance is a decentralized insurance platform. It focuses on slashing events in DeFi protocols. Slashing events refer to instances where users' funds are at risk due to protocol misbehavior, such as oracle failures or protocol governance attacks. Unslashed Finance offers cover against slashing events by pooling funds from users and providing compensation in the event of a successful slash.
Example:
Monowar participates in a liquidity pool on a decentralized exchange that relies on oracle data for price feeds. He purchases cover from Unslashed Finance to protect his funds against potential losses resulting from oracle manipulation. If a slashing event occurs due to oracle failure, Monowar can file a claim with Unslashed Finance and receive compensation for his loss.
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VEIGO (Community Mod)
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Your every episode about DeFi insurance was very important and very helpful, thanks keep going