How to Buy Defi Insurance By Defi Dad
DeFi TVL (Total Value Locked, similar to AUM) for applications on Ethereum have reached new all-time highs of $4.6B USD and more importantly, 4.5M ETH. While the champagne is flowing, those of us who have been around for the highs and lows of crypto know better than to not think about the risk. The #1 risk in using DeFi applications is a smart contract bug that leads to a total loss of funds. Thankfully, while DeFi TVL has grown by over 80% the last month, one of the most successful DeFi projects has been the leading “DeFi insurance” provider, Nexus Mutual. Nexus, a people-powered alternative to insurance built with smart contracts on Ethereum, offers a product called Smart Contract cover, which allows mutual members to pay a premium (1.3% to 20% APR depending on the DeFi app) to ensure a payout in ETH or DAI if a smart contract bug is ever discovered.
Think back to 2016 and imagine if this had existed during the DAO Hack which lost 3.6M ETH or $1.4B ETH based on today’s ETH price near $400!
Nexus has grown remarkably from ~7,000 ETH a year ago to over 86,000 ETH in the mutual capital pool, which is up over 4X in just the last 30 days. Nexus also boasts a new all-time high of $18M USD in active cover.
For the new and advanced DeFi investor, buying Smart Contract Cover from Nexus Mutual is as easy as quoting and buying car insurance--actually easier. Nexus provides protection for nearly all major DeFi apps including Compound, Maker, Synthetix, Aave, dYdX, Curve, Balancer, Uniswap, and more.
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