March 27, 2024
Quantstamp Introduces DeFi Hack Prevention and Insurance for US Consumers
Latest Cryptocurrency News

Quantstamp Introduces DeFi Hack Prevention and Insurance for US Consumers

For consumers in the US, Quantstamp is introducing DeFi hack prevention.

The product is the most recent attempt to protect customers as hackers remain a common danger. It will reimburse clients of the crypto asset security company in the event that their assets are lost in an attack. But prior hack coverage solutions have run into problems, so it’s unclear whether Quantstamp will be able to overcome them.

Sebastian Banescu, the company’s head of insurance, claims that Quantstamp was established as a security auditing platform following the 2016 DAO compromise and that it started to examine offering hack coverage as early as 2018. Banescu likened the offering to Apple Care for DeFi, and the North Carolina Department of Insurance has given it the go-ahead to start in the US.

Users of Aave, Compound, Curve, Lido, and Uniswap can pay Quantstamp to ensure their holdings on those exchanges. According to the business, the product will cost between 2.55% and 4.28% of the insured amount.

The attempt to insure customers against hacking has not been made exclusively by Quantstamp. There were 23 DeFi risk coverage projects and $34.4 million in claims paid out last year, according to a study from DeFi protection provider Opencover. hackers continue to be a significant concern for DeFi investors, with $699 million in the crypto sector lost to hackers in Q3, according to a Certik analysis. However, the success of hack coverage has been mixed thus far.

There is presently more cash available to insure cyber risk than there is interest in hack coverage, according to Jeremiah Smith, CEO of Opencover.

“So far, the main challenges are on the risk pricing,” Smith stated. “If the yields are low, and the premiums are high, it’s not always worth it to insure a position on one of these protocols.”

Users will be lured to Quantstamp, according to Banescu, due to its regulatory position.

“If we as an entity who’s offering this service don’t want to pay out, there’s a regulator who can force us to pay out,” Banescu stated.

Since vulnerabilities typically occur as a result of upgrades, Smith said that rates for DeFi coverage should reduce if protocols stop upgrading as regularly. For instance, since coming live in 2021, Uniswap v3 has not been compromised, lowering the risk for insurance companies when underwriting assets on the protocol.

Image: Freepik

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