276,954 times increase in 3 years.

The DeFi boom continues.

On November 1, 2017, the total locked position was 62,000.

On December 10, 2020, the total lock-up volume rose to $17.2 billion.

The explosive development of DeFi this year is obvious to all. However, in recent years, there have been many incidents such as hacking or bugs in the contract itself, which have caused the loss of DeFi users, and gradually exposed the risks of smart contracts.

Therefore, DeFi insurance covering oracle machines, smart contracts and price risks has naturally become a favorite.

If calculated with an insurance penetration rate of 5-10%, the current DeFi market needs at least USD 860 million in insurance.

Jocy Lin, founding partner of IOSG Ventures, predicts that the Defi insurance market will reach US$1.4-4.5 billion in 2022 and US$2.5-15.2 billion in 2025.

Who are the major players in this market with huge potential?

1、Nexus Mutual

It is one of the earliest projects to explore DeFi insurance, and from a statistical point of view, it has grown rapidly since its launch.

In May last year, the locked position of the platform was only 23 US dollars, and this year it exceeded 100 million US dollars.

Nexus Mutual is currently enabled on the Ethereum mainnet and provides smart contract insurance services for multiple platforms such as dYdX, Compound, MakerDao, 0x, and Nuo Network.

However, the price of its token WNXM has been falling all the way.

2、COVER

Although the lock-up volume of COVER is only 38.79 million US dollars, its price trend is much more beautiful than that of WNXM. After being launched on the Matcha Exchange, the price has doubled from a minimum of $450 to a maximum of $1385.

Of course, this is inseparable from the magic power of "turning a stone into gold" in "AC, the handlebar in the sickle world".

Judging from the information disclosed in the agreement, it is a peer-to-peer insurance market. Its features include no KYC, non-fund pool pledge mode, and letting the market decide the cost of insurance, etc.

In addition, COVER's insurance goals are not limited to DeFi insurance and cryptocurrencies, and can provide an insurance market for anything. As long as people have needs, the COVER protocol will encourage market makers to meet users' various insurance needs.

From this perspective, it is worth looking forward to.

3、Nsure Network

Nsure Network is an open insurance platform prepared for open finance. It is a decentralized "Lloyd's" (the largest insurance company in the UK), which draws on "providing a trading market for insurance risks, and premiums are priced by dynamic models." The concept of smart contract attempts to provide a new hedging method for smart contract risks.

Founder Jeff Ren said, "When building the Nsure platform, we hope to apply to a wider range of insurance needs, including the capital risk of traditional exchanges, or the catastrophe insurance that is still relatively lacking in the traditional insurance industry, and even All traditional insurance products can match demand and supply on the Nsure platform.”

Users put ether and some stable coins into the fund pool to mine Nsure Token. When you become a Nsure Token Holder, you can participate in the project Staking to help the platform underwrite and obtain premium income, and you can also participate in governance through Nsure DAO.

In other words, the insurer's income comes from "50% of the insurance premium + the income from the pledged tokens to obtain the voting rights of claims settlement + the profit from the appreciation of Nsure's new tokens".

NSURE has only recently been listed on the exchange, with a minimum of $0.2284 and a current price of $0.8666, an increase of 279%.

Although the lock-up volume is only 3.2 million US dollars, the growth rate is not as good as Nexus, but it can help users protect the risks of DeFi assets through a set of option agreements.

Opyn's current insurance targets include ETH, cDAI and cUSDC in Compound.

For Compound depositors, after depositing assets to obtain cTokens, they can purchase oTokens to pay insurance premiums. Afterwards, no matter whether Compound is run on or hacked, they can redeem their assets with the oTokens and cTokens in their hands.

You can become an underwriter on the Opyn platform, and you can get the oToken mentioned above by providing collateral to Opyn’s insurance fund pool, and you can earn insurance premiums by selling the oToken in the market.

However, if the mortgage rate is less than 140% within the insurance period, it will be liquidated. At this time, you can supplement the collateral or buy back the oToken from the market and destroy it to avoid being liquidated.

So far, Opyn has no plans to issue tokens, and platform governance is mainly team-based.

As the multi-trillion dollar insurance industry has been monopolized by large corporations, it has become an inefficient and expensive industry.

In response to this problem, Etherisc has proposed a solution based on blockchain technology, dedicated to building a platform for decentralized insurance applications, improving the efficiency of insurance purchase and sales, and reducing operating costs.

Therefore, unlike Nexus Mutual, which expands its insurance business from original scenarios such as wallet theft and contract loopholes, Etherisc focuses on starting from offline scenarios, such as flight delay insurance, agricultural insurance, Taiwan risks, etc.

Etherisc aims to be a compliant, fully permissioned insurance platform in the emerging blockchain economy.

However, Etherisc, which has completed its financing plan in 2018, has not yet made significant progress due to the development of oracles, policy compliance and regulatory obstacles.

6、CDx

CDx is an open protocol on Ethereum for creating tokenized credit default swaps, using the Ethereum blockchain as its custodian, clearing and enforcement agency, rather than a centralized financial intermediary and legal system.

CDx's vision is to tokenize the credit default swap market in the $10 trillion traditional financial market.

However, CDx's code on Github has not been updated since October 2018, and the entire project seems to exist in name only.

7、VouchForMe

The goal of VoUchForMe is to become a blockchain-based decentralized insurance platform that replaces traditional insurance with a social proof guarantee.

However, I mention this project to tell you that this is a leek project.

Its token IPL is trending as follows, with the price depreciating by 97% from its peak.

8、1inch

Just at the beginning of this month, 1inch successfully completed its Series A financing of US$12 million, with investors including Binance Labs, Galaxy Digital, Greenfield One, Libertus Capital, Dragonfly Capital, FTX, IOSG and other institutions.

1inch has thrived because it is a master of decentralized trading platforms. Integrate the liquidity of multiple DEXs and AMMs such as Uniswap, Curve, Balancer, Kyber Network, etc., and then divide a transaction into each platform, and then match to get the best transaction price, thus achieving the result of reducing trading slippage and handling fees.

In the eyes of investors, it might not be an insurance aggregator.

Today in August, the official announcement stated that $1INCH tokens have been pre-allocated to 1inch’s core team, ecosystem developers, investors and advisors, and most of the tokens have a vesting period of 4 years. The remaining 2% of the total supply of tokens can only be obtained through liquidity mining on Mooniswap participating in the platform.

The above are the main players of DeFi insurance.

From the perspective of vision, COVER, Nsure, and Etherisc are relatively similar. They hope to open up offline channels, poach the traditional insurance giants, and grab food.

As one of the veterans, Nexus is the leader with the most locked positions, but the price of tokens is not good.

Opyn has not seen much hope yet, and CDx is already cold.

If it is 1inch, it looks more reliable, and the thighs on the back are also thicker.

However, the competition in DeFi insurance has just begun, and the future market structure is still unknown.

Traditional banks can be impacted by Alipay, so how can traditional insurance not be impacted by DeFi insurance?

The small saplings we focus on today may be the big trees in the future.