DeFi
Crypto and DeFi wallet company Fordefi gets coverage from insurance giant Munich Re — TradingView News
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 on-chain decentralized trading platforms has been described as a “hacker’s playground,” making it a tough ask for even the most digital asset-focused insurer .
But Fordefi CEO Josh Schwartz said the new product has naturally led to deeper explorations of the DeFi arena for Munich Re, with more to come in due time. Schwartz was previously COO at Curv, the MPC boutique acquired by PayPal in 2021, which was one of the first crypto custody companies to work with Munich Re.
“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. As for what exists in the market, Chainproof has provided cover for DeFi users in the event of a technical code failure, and there is the popular decentralized capital pool approach created by Nexus Mutual.