DeFi
Crypto and DeFi wallet company Fordefi gets coverage from insurance giant Munich Re
Fordefi, a cryptocurrency wallet designed for decentralized finance (DeFi), is working with German insurance giant Munich Re, the companies said in A blog post THURSDAY.
Facilitated by Kansas City-based insurance broker Lockton, Fordefi’s wallet policy covers cyberattacks and things like internal fraud or collusion, as opposed to protection at the smart contract level.
The dollar amount of coverage was not disclosed, but aside from the general level of coverage in Fordefi’s portfolio — which uses intelligent key-sharing capabilities known as multi-party computing (MPC) — customers can top up more coverage with Munich Re on an individual basis.
DeFi’s rapidly evolving collection of decentralized on-chain trading platforms has been described as a “playground for hackers”, making it a difficult ask for even the most digital asset-focused insurer.
“The policy covers external cyber threats and attacks that could compromise the platform, as well as internal fraud or employee collusion,” Schwartz said in an interview. “[Munich Re] does not intervene at the smart contract level, but engages with the most active players in DeFi, starting with a framework they are comfortable with, namely the security of private keys and wallet components .
When it comes to smart contract risks, Sarah Downey, head of blockchain at Emerging Asset Protection (LEAP) in Lockton, said the insurance industry is moving in the right direction. Regarding what is available on the market, Chain resistant has offered cover to DeFi users in the event of a technical code failure, and there is the popular decentralized capital pool approach created by Nexus Mutual.