When the Insurance Uses Its Full Potential — Insuring Blockchain Networks
Preserving on-chain capital through decentralized insurance harks back to TradFi, where capital protection with insurance has been a standard practice, resulting in a multitrillion-dollar industry.
This sector’s magnitude is evident in the trading volumes of CDS that safeguard against bond risks, reaching astronomical figures of over $30T in 2022.
As projections indicate, the global insurance market is set to achieve a staggering $12.7T by 2030, with Decentralized Insurance poised to reach $135B in the years to come. It is an opportune moment to explore a catalyst that could turn these estimations into reality — “Insuring Blockchain Networks.”
Source: Verified Market Research
Source: Allied Market Research
Taking insurance coverage beyond protocols to encompass whole networks, particularly the sprouting ones not yet equipped with robust security, could foster entirely trustworthy blockchain ecosystems. These ecosystems would provide critical support to the dApps being developed on these networks.
Fierce competition is observed among emerging blockchains for attracting both TVL and developers. It signifies a compelling occasion for blockchains and DeFi insurers, such as Uno Re, with significant potential amidst lessons learned from Terra’s $20B debacle.
A testament to the potential of this landscape is the skyrocketing TVL within the Solana ecosystem — from slightly over $100M to more than $10B, marking a hundredfold increase within a year. By capitalizing on such growing networks, DeFi insurers could provide multi-billion-dollar coverage across various blockchain ecosystems, thereby fortifying them.
Source: DeFillama
The emergence and rising usage of new L2s, mirrored in the growth of TVL, indicate an untapped prospect. Harnessing the insurance capacity and capital on L1s to insure these promising new L2s and their developed dApps opens up exponential opportunities.
An example is the drastic increase in TVL in an Ethereum L2 Base chain, which surged from $8.5M to over $300M within five months.
Source: DeFillama
One example is the massive rise of TVL in the Base chain of an Ethereum L2, with TVL going from $8.5M to $300M+ in less than five months.
At Uno Re, our endeavors to secure emerging chains are well underway, showcased by our collaboration with Scallop. Looking ahead, we are enthusiastic about uncovering more opportunities.
Our focus on the emergent Blockchain ecosystems from a DeFi insurer’s perspective could unearth mammoth opportunities for Uno Re.
As we gear up for expansion, we invite our community and Olympus Council to share their insights into potential blockchains and L2s. This focus could facilitate more coverage and help cultivate new ecosystems with the utmost security.
About Uno Re
Uno Re is building a fully secure decentralized insurance ecosystem to serve our institutional and individual clients. Despite daily heavy losses incurred by DeFi exploits, our clients can rest easy with our customizable, affordable, and convenient coverage.
Our insurance platform has sold over $10 million in coverage across various crypto protocols. It has over $4.4 million in an active on-chain capacity, with risk underwritten for over 85 different protocols and six stablecoins on our B2C Insurance Sales dApp — The Cover Portal.
