Chainproof has launched as the world’s first regulated smart contract insurance provider, fusing the unprotected gap between traditional insurance with decentralised finance (DeFi).
It is the brainchild of Quantstamp, a blockchain security auditor that has since secured over US$200 billion in digital asset risk. It plans to offer licensed, institutional-grade insurance coverage for open-source, non-custodial smart contracts on public, decentralised blockchains.
Sebastian Banescu, chief executive officer of Chainproof, said the product is a “must-have for institutional investors who want to navigate the DeFi space safely.”
According to Defi Llama, DeFi has over US$70 billion of total value locked – an overwhelming 600% increase from 2020. With this sudden growth comes significant risks as smart contracts are hacked or exploited from the lack of regulated insurance in the market. Traditional insurers also often fall short of the technical expertise needed to underwrite policies related to smart contracts, it was suggested.
The launch of Chainproof is set to act as a credible solution for asset managers to protect the crypto portion in their portfolios. It’s backed by global leaders in the insurance industry, with seed investment from SOMPO Light Vortex and reinsurance support from Munich Re.
“SOMPO is proud to be a foundational partner to Chainproof, a pioneering insurance provider for the growing DeFi economy,” said Koichi Narasaki, chief executive officer of SOMPO Light Vortex. “Chainproof represents the leading-edge of regulated insurance solutions for the groundbreaking world of Web3.”
“Quantstamp and Chainproof provide the specific risk assessment expertise which is needed to navigate the emerging DeFi insurance market,” said Andre Knoerchen, head of new tech underwriting at Munich Re. “Institutional investors will be further enabled to succeed in the DeFi sector, if they are covered by regulated insurance, which we support through reinsurance.”
