Would You Insure Your Crypto?
I suppose we all agree that safety is the most important thing when it comes to crypto and money in general. We keep saying not your key, not your crypto or not your money, which is very true. We own our keys on the Hive blockchain, that's also the case with a cold wallet, but exchanges doesn't work like that. You have a password and not a key, so you basically have to trust the exchanges with your crypto. If they get hacked, you may get your crypto back at some point but who knows.
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Shield Finance is a Multi-Chain DeFi Insurance Aggregator that allows users to buy protection against major market crashes due to black swan events (hacks, exploits, rug pulls, sell-offs).
Shield utilizes a proprietary aggregation engine to provide custom insurance packages for investor needs. source
They are partnering up with exchanges, wallet providers, yield farms, and other DeFi-centric investment pools, so once the project is launched, when buying crypto on these platforms, you'll have the insure option as well.
The platform will be deployed across several blockchains, including Ethereum, Polkadot, Solana, and Binance. After the IDO, Shield Finance will continue developing the platform, adding more service providers, insurance plans, and releasing its web app. source
So this means in about a month you will have the possibility to ensure your tokens against a series of events. The thing is, you can never be too sure about anything and an extra layer of security is always welcome.
This option however will not be used by everyone. They most likely will have a series of packages on their offer and small wallet holders will possibly skip it.
I haven't seen the offer yet, but I'm curious to see how it works and I'm going to read it to learn more.
Now the question is, would you trust them?
In some countries insurance is everything and a lot of people pay huge amounts to these companies.
In my country insurance companies are flourishing as there are compulsory insurances. What you buy on credit must be insured for example, which makes sense. The problem is, when something bad happens and you have to deal with the insurance company, they do everything in their power to cut or avoid payment. Most of the times the insured parties have to fight for their rights and there are cases that end up in court.
As the quote above says, they will be offering protection against major market crashes due to black swan events (hacks, exploits, rug pulls, sell-offs).
Taleb argued that because black swan events are impossible to predict due to their extreme rarity, yet have catastrophic consequences, it is important for people to always assume a black swan event is a possibility, whatever it may be, and to try to plan accordingly. Some believe that diversification may offer some protection when a black swan event does occur. source
Nassim Nicholas Taleb is a finance professor, writer, and former Wall Street trader who started popularizing the term black swan in 2007 and in 2008 all hell broke loose as the financial crisis happened.
Hacks are happening all the time unfortunately, rug pulling as well.
Sell-offs, this is a very good one. Sell-off in this case refers to stop losses. If you're trading, you (most likely) use stop loss to protect your funds. When the market is reacting to news like it happened today, or when there's a correction, sometimes your stop loss gets executed, the price goes up afterwards and you lose because you can't buy the token back at a lower price. With insurance, you have the right to sell, but you don't have to. This will be a big help, especially if you're managing a substantial portfolio.
Sooo, what do you think? Would you be interested in crypto insurance?
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I would only insure something if I HAVE to. Like license and home. Otherwise insurers are known not to pay out.
That's my experience too. I can't say a good word about them, unfortunately. The only insurance I am willing to pay for without being forced to is international health insurance when I go abroad.
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ENGAGEtokens.I'm also curious to see how it works but I wouldn't have much faith in it until it was established and had some payouts behind them.
I'd want to know exactly where the payouts would be coming from. It's an interesting idea though.
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My portfolio is a small one at the moment, but I'm interested in the details, so can't wait to see what they are offering. Trust me, we're going to get some feedback soon.
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ENGAGEtokens.It is an interesting situation as you have to trust that the insurance provider won't do the same black swan event to you. I don't know if I would put huge trust into this project, though if they are legit it is a great concept
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Yes, they have to prove themselves first. That's the only way people are going to trust them, but then again, so is the case with most of the defis and pretty much everything in crypto.
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ENGAGEtokens.