As the crypto sector continues evolving, most companies operating in the industry will soon get concerned about needing a form of insurance protection to secure their held assets from cyber dangers.
It’s likely that you’re already using a variety of insurance services and are quite familiar with protecting your car, house, or even life. But when it comes to protecting digital assets, things get slightly more complicated.
To learn more about the current blockchain-related threats and best cyber insurance practices, the Cybernews team contacted Dan Thomson, the Chief Marketing Officer of InsurAce – DeFi insurance services company.
How did InsurAce originate? What has your journey been like since?
InsurAce started in the DeFi summer of 2020 after we recognized the need for better and more insurance protocols in the industry. Crypto was continuing to boom while hacks and violations were also increasing. As a result, InsurAce was born and launched on the main net in April 2021. Since that Ethereum launch, we’ve also developed onto BNB Chain, Avalanche, and Polygon. Now, we are the leading multi-chain insurance protocol, and we’ve received further grants to develop Harmony, NEAR, and Aurora (NEAR EVM). Along with this, in the last 2 months, we’ve also been approved for another grant from Polygon and we’ve been incubated into Binance’s MVB program. As of today, InsurAce is protecting $290m+ in assets, offering cover for over 120+ protocols across 20+ public chains. We have approximately 40k users and 15k token holders. We’ve grown an ecosystem of over 60 partnerships with a community of 100k and on March 31st, we launched V2 which has seen the release of the first batch of new products while also an upgraded look and feel to our site and dApp. It’s been an intense 12 months and the growth has been beyond our already very high expectations.
Can you tell us a little bit about what you do? What is decentralized insurance?
Decentralized insurance is very similar to traditional finance but we’re completely focused on protecting all DeFi investors and users to try and to make crypto safer for everyone, regardless of their economic situation. Right now, we’re protecting them against hackers, smart contract vulnerabilities, and any other bugs in various pieces of code. Today, this industry has a couple of trillion dollars of the crypto market, with about $250 billion worth of funds locked into DeFi at the moment, and less than 5% of that is insured right now. This is where InsurAce comes in. To create a much safer environment for all. You look at the previous year of DeFi, and there's been over $3 billion worth of hacks. It's not slowing down, it's up from about $120 million in 2020. We protect users against that. We, therefore, believe that 2022 is the year of DeFi insurance.
What are some of the most serious threats associated with the blockchain landscape nowadays?
We update our community about this every single month. Our blog reviews the ongoing attacks that happen within our industry. In March, there were over 30 major events, and we analyze what has happened and whether InsurAce would have been able to cover the violation. Right now, we protect against the most common threats, particularly smart contract vulnerabilities. We’ve been at the forefront of innovative product solutions, and we’ve also created cover products for stablecoin depeg insurance, rug pull insurance, and more. We’re also planning on launching NFT and wallet-based insurance, these are planned as part of our V2 release. As this industry evolves, so will the scammers, we will continue to push forward as a preventative measure and a deterrent. We aim to cover as many people as possible and make it harder and harder for hackers to compromise assets that don’t belong to them.
Do you think the recent global events affected the way people approach digital assets?
I believe they have but at the same time, not enough. The pandemic, recent conflicts, and other major events have made us realize how quickly life can change from one day to the next. They’ve also solidified the current issues within the financial industry and how the traditional sector has failed to evolve for mass global adoption. There are millions still unbanked, there are millions without financial and social security and blockchain technology is a real solution, particularly for those in countries with less economic infrastructure. We have seen an influx of new users to web3 and I think global events have pushed that. I’m ambitious and I believe in this technology, I think there should be a lot more digital asset holders than currently exist. It’s not a bad thing though, we will get the insurance side right and when mass global adoption happens, our product will be “standard” for new digital asset owners, a bit like how car insurance is in most countries today.
In your opinion, what are some of the worst mistakes that new digital asset owners make?
Not securing their assets. New digital asset owners are used to trusting the banks and centralized organizations with protecting their money. That being said, we all hear about the regular scams that occur in the centralized world today and the lack of protection from these banks. That’s why more and more people are trusting DeFi. Cutting out the middle man and creating a technological environment where every transaction is open and transparent means that security options are still just growing in the industry. It’s new and we’re all learning. We believe that there is now enough information available online to help digital asset owners keep their crypto safe, but at the same time, it’s not pushed from the beginning, and many may not know where to research. In the same way, digital wallets will push the need to protect your holdings in many ways, we will push to highlight the absolute need for insuring those assets.
What security measures are crucial both for crypto owners and casual Internet users?
We should always be aware of how important security is. The internet is still fairly new, we’ve seen it evolve enormously in the last three decades. There was the internet (believe it or not!) before online advertising. There was the internet before antivirus software. There was a time before streaming, instant messenger, online banking, and other activities that we take for granted today. Most of us today wouldn’t own a computer or laptop without installing a form of protection. VPNs have been adopted by many allowing a safer, more anonymous, and international way for users to protect themselves when browsing. Despite the various deterrents, we should all still be vigilant. This is not just the case for crypto owners but everyone. An attack or scam can happen to anyone at any moment, the best that we can do is prepare for it and protect ourselves against potential threats. Each year, we will all learn and soon certain attacks or scams will fail. Most of us are acknowledged to avoid the email in our junk file that tells us that we’ve won the lottery in a country that we’ve never set foot in. Soon crypto users will know that if they are holding their assets in a certain protocol, they need a form of insurance for protection.
Since blockchain is a relatively new technology, there is still some confusion surrounding it. What misconceptions do you notice most often?
That everyone understands what they are talking about! Blockchain technology and web3 are incredibly powerful, but you don’t need to understand every single technical aspect to get involved. We all have televisions, fridges, ovens, etc., but do we all know about the building process and have the same knowledge as the engineers that designed these appliances? No. We need to continue to develop the technology in simpler terms to create an environment where everyone can become a user. We also need to eliminate the false narrative that blockchain technology is for allowing people to get rich quickly. Bitcoin didn’t happen overnight (even though it seemed that way), and there are some incredible projects out there. The misconception that everything will be an instant success needs to be filtered from the global community. We’re thinking about the long-term strategy, and that’s why we have a lot of faith in our protocol becoming a “standard” for future users of the technology.
What are your predictions for blockchain technology for the next few years?
The next few years will be a bit of a rollercoaster. As with everything right now, the current global and political situation, as well as recovery from the pandemic, it’s hard to say for sure what will happen. We hope these recent monumental events will see governments and major organizations take the technology more seriously, but I am worried it will divert their focus, meaning that more regulation and official implementation take longer to process. I think we will continue to see projects that have a real passion for helping crypto users and the industry, but I do also believe that the hacks and violations will not slow down. We will have to do what we can to minimize the risks and highlight the power of a blockchain future.
Share with us, what does the future hold for InsurAce?
On the last day of March, we released the first batch of our V2 upgrades. As well as upgrading our look and branding, we’ve implemented our blog to improve our SEO ranking. (It’s hard when Google thinks you’ve just misspelled "insurance"!). For our dApp users, we’ve also launched some new products that will fill in the gaps from InsurAce V1. As per the release, we’ve launched our multi-chain insurance aggregators, which make it easier for users to purchase cover from multiple networks with only one click. We’ve implemented a new dynamic pricing strategy, we’ve included the much-anticipated launch of cover cancellations, and also made our API public for all blockchain developers. We’re excited by the announcement and how our community has already taken to it. In the first few days of April, we’ve seen a solid growth pattern that shows the initial elements of success. We will be releasing further batches throughout the year. We also plan to increase our ecosystem with more valuable, long-term, security-focused partnerships while also increasing our marketing activities. We’ve taken advantage of our dispersed global team, and we’ve been attending major crypto events and organizing our side events with various partners such as Harmony Protocol and Hacken. In the last fortnight, we’ve been to Avalanche Summit in Barcelona and Binance Blockchain week in Dubai. In the coming days, we will be at Paris Blockchain Week and moving on to other major events like Bitcoin Miami and LA NFT. If you are at any, come find us as we are always down to meet new people and hear about what they are doing while showcasing InsurAce. 2022 is going to be an incredible year with everything that we have planned.