On-chain insurance in DeFi
Shedding light over the importance of the insurance in Defi, the founder of Coinbase exchange believes On-chain insurance in DeFi could be the next big thing.
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Fred Ehrsam, the founder of Coinbase, wrote a blog after having a conversation with the crypto bulls. The other participants of conversation were Vitalik Buterin, Tarun Chitra, Gus Fuldner, Matt Hubang, Hugh Karp, Dan Robinson, Tony Sheng, and Nick Tomaino
Ehrsam elaborates the importance of crypto-native insurance which would provide a critical service by backing the digital economy and supporting trillions in the future. He also speculated that insurance may also create a ‘prediction market’ where-in many traders would love to participate.
However, the problems related to building crypto-native insurance were also highlighted in the blog. The concerns include;
- The structure of the crypto native insurance
- The marketplace on which it can be built
- Efficiency, ease of creating and evaluating coverage, and much more.
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He also adds that if the underlying problem navigated, this sector has the opportunity to support billions in Defi Today
Crypto-native insurance can produce a valuable service to the community and feels ripe to build today. The problem space is extremely challenging to navigate, but if navigated, has the opportunity to support billions in Defi today and trillions in global commerce as crypto expands over the coming decades.
Why does Need for Defi Insurance emerge?
The Defi market has witnessed significant growth in the past months. The Defi market cap has risen above $11 billion and the value locked in the smart contracts has touched $4 billion. With the growing demand for the Defi markets, the need to secure the funds might get prominent in the coming days.
As the Defi insure is not very common in the crypto space, the first player would be thriving through the market. Recently, Coinbase was reportedly planning to go public to become the first publicly traded IPO in the US. Some reports also suggest that It has started with its consultation and planning phase.
Additionally, Coinbase integrates support for Defi protocols allowing users to lend crypto. It enabled lending for Ethereum (ETH) and ETH-based tokens.
Coinbase, one of the top exchanges in the world which prioritizes the security of user and user-funds could possibly come up with the Crypto-native insurance very soon. The founder Fred discussing the importance of the insurance in the Defi Space might indicate the company’s future plans to safeguard the user’s assets from bugs or attacks.
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