To Insure or Not to Insure?

Insurance has always been something that I considered quite boring and very complicated. Why would you pay someone every month for a service that you were highly unlikely to use?

I know that car accidents happen, that is true. But I barely drive. Who needs life insurance? I am still pretty young. Nothing is going to happen on my 5-day holiday. And… why would I bother getting insurance on my NFT collection. I have full control over my assets.

But do you, really?

If the last year has taught us anything is that risks are everywhere: Accidents happen. Rugs, hacks…they happen. Often. We lose things, things go wrong unexpectedly and, to quote Forest Gump, “Shit happens”

When you do not buy insurance, you take that risk on yourself. No one else is there to support you if or when things go astray. On the other hand, if you buy a policy, meaning when multiple parties engage in an insurance contract then, that same risk is diversified and shared amongst those parties.

The point is that insurance, when done correctly, is a better outcome for risk management than individuals doing their own thing.

When looking at the Web3 industry, Insurance is not really a thing. Less than 1% of assets are insured, virtually nothing. However, as of December 2022, more than 117,000 rugs were recorded, 41% more than in 2021.

Have you heard of network effects?

If you are in crypto, then of course you have. If you are not, well, think of insurance as a network of shock absorbers that work together to dampen volatility. It is not a bad thing — being able to bounce back because of shared and diversified risk management helps all participants in the long run.

So think about it.

There’s you.

And, then there’s us

and together we’re Plural.