While it’s a relatively new concept, crypto insurance is undoubtedly moving in the right direction. Its rapid growth in recent times is reflective of the fact that crypto-insurance companies have emerged to provide a viable level of protection to users who are looking to secure their digital assets. But how does crypto-insurance work in practice, and why it is important? Let’s take a look now.
What is Cryptocurrency Insurance: A Brief Guide
Crypto insurance protects users against losses that occur from cybercrime. It’s important because cryptocurrencies are not regarded as legal tender in most countries. Therefore, it is not protected in the same way that typical financial transactions are. It’s for this reason that crypto-insurance firms have emerged to protect users with digital assets against hackers and other cybercriminals. Although the concept of crypto insurance is still relatively new, more and more insurance companies are emerging all the time to serve the burgeoning need for digital asset protection.
As crypto markets mature, they will attract more interest from other industries, particularly actors within insurance. In the next few years, we’re likely to see a significant increase in insurance providers in the crypto space, provided that the industry continues on its current trajectory.
Why is crypto-insurance important?
The primary reason that crypto-insurance is important is due to the instability of the cryptocurrency ecosystem. What’s more, hackers have profited from the skyrocketing valuation of certain coins and have developed more sophisticated ways of stealing cryptocurrencies from unsuspecting victims. Also, consider the fact that the crypto industry is unregulated, which means that criminals have even more free reign to try and steal digital assets. Crypto insurance offers individuals and companies an added layer of protection against such crime and is an important consideration if you hold valuable crypto assets.
What’s included in crypto-insurance?
In Web3, theft is a huge problem. For instance, criminals stole more than $10 billion in 2021 alone as a result of hacks and frauds in the crypto industry. Of this $10 billion lost, $2.6 billion was stolen due to exploits in DeFi protocols. This is because hackers have become skilled at exploiting the dearth of coverage in the DeFi space, and there’s little hope that all of the money stolen by hackers will actually be recovered.
You can easily find cryptocurrency insurance, and you can sign up for a policy with one click. It protects you against hacks, and if your digital assets are stolen, you will be reimbursed by the insurance company. Ultimately, you can protect all of your coins from hackers with comprehensive crypto-insurance, and policies are even available for crypto groups. Therefore, if you have a large holding of crypto, there’s no doubt that it’s worth insuring your assets against theft.
A unique solution for cryptocurrencies
MTR Labs has launched a new Rust-based insurance protocol called Amulet. Its focus is on protecting all users of emerging technologies within the cryptocurrency industry. Their DeFi insurance protocol is deployed on Solana and has been created via a unique Protocol-Controlled Underwriting (PCP) approach. It was created with current market demands in mind and is a unique and sustainable model that can be scaled in the future. After all, a lot can change in the crypto space, and Amulet’s Solana-based solution can offer you protection against the potential theft of your crypto assets. Learn more about how Amulet works today and discover how you could benefit from crypto insurance.