Tagline: FDIC insurance for decentralized deposits
Defisurance provides protocol hack insurance for for DeFi deposits. We use Augur to protect the cryptocurrency you hold in decentralized protocols.
Defisurance supports Torus, Metamask, and Coinbase Wallet — and uses The Graph and Infura as backing infrastructure.
US banks have FDIC insurance to protect against deposit loss during bank failure. Brand new decentralized finance protocols have no insurance to protect deposits in the event of a hack.
Defisurance makes it much easier for cryptocurrency investors to choose decentralized protocols, and exponentially unlocks the number of people who will feel comfortable investing using decentralized products. (24 hours after we started this project at EthNY, a 0x developer tweeted about wanting this exact product as it would "drastically improve adoption" )
This is a project started at the ETH NY 2019 Hackathon.
defisurance allows defi depositors and defi protocol developers to buy insurance for the funds held in decentralized finance protocols like 0x, Dharma, dYdX, and Compound. The insurance is provided through a one-sided bet using Augur (investors in defisurance take the other side of the bet).
Initially, we expect users themselves to buy insurance. Over time, defi protocol developers can buy insurance for all the deposits on their platform automatically. With minor changes, they could then automatically pay out if a hack was discovered, guaranteeing to their customers that their deposits are secure. This would make it easy for them to attract new users and stand out versus other DeFi protocols.
Beyond selling insurance, defisurance lets investors bet that the protocols will not be hacked. This provides return even in the instance a single underlying protocol is hacked (all investments are automatically diversified across all protocols, so no investor loses all their money if a single protocol is hacked). We expect that smart contract auditors might eventually take positions in this market, given the unique knowledge they have of which smart contract protocols have taken appropriate due diligence.
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