Crypto-Insurance Tokens are Heating Up - What Are the Differences?

There’s a new trend that you may not have noticed yet in the world of cryptocurrencies – that trend is insurance. So much so, that Coingecko now has a dedicated Insurance page. Insurance products and services come in all kinds of packages. As industries and consumers continue to play catch-up to the evolution of crypto & DeFi globally, those that can visualize where the current trend will take us in the coming years will undoubtedly feel fortunate to have been at the right time right place. The crypto-insurance marketplace is not only getting more crowded but it’s also heating up.

The adage “History doesn’t repeat itself, but it often rhymes,” made famous by Samuel Clemens (a.k.a. Mark Twain), comes to mind.

As we saw with privacy coins, oracles, staking tokens, yield-farming tokens, NFTs, & governance tokens, when a narrative becomes the focal point of the crypto community, it becomes high-octane fuel for others that are alike.

Look no further than the current popularity of governance coins as a prime example. Uniswap’s $UNI token was the first governance coin that was airdropped to loyal users of the Uniswap DEX (decentralized exchange). It wasn’t long before you saw dozens of governance tokens being listed and climbing up the charts in a mind-blowing fashion.

With the rise of decentralized protocols disrupting traditional finance, it is only logical to assume that in these uncertain times, safeguarding digital assets and preserving purchasing power go hand-in-hand – especially as governments continue to print more fiat into circulation to prop up crumbling economies globally.

According to a crypto market report by WintergreenResearch, more than 50% of cryptocurrency users are less than 44 years old, making most crypto investors millennials.

According to an insurance industry trends report for 2020/2021:

Millennials (now in their 20s and 30s) have overtaken baby-boomers as the largest population group in the US.
These young consumers have a different set of expectations and spending habits, compared to their predecessors.
They prefer products customized to their needs and companies that engage with them on digital platforms.

Being the first to address an unserved $1,000,000,000 opportunity certainly has its perks. With customers willing to share their information in exchange for ‘lower’ rates, it’s not hard to see the need for an alternative to high fees and sub-par products & services that offer very little in terms of coverage options and products. The crypto landscape has yet to establish an online insurance marketplace, and they’re still aren’t any policy management platforms within the vast crypto ecosystems.

With more crypto-insurance projects seemingly being listed every week, what are the key metrics and variables to consider? Let’s compare some projects in the budding crypto-insurance industry to examine the differences between them. The statistics used below are current as of 2/11/21.

Nexus Mutual

Launched: July 2020
MC: $432,800,000
Token: $NXM
Traditional Products: No
Autonomous Claims: No
Token Use-Cases: 2
Products: 2
DeFi Application: No

Nexus Mutual offers two insurance plans; the first plan covers “unintended uses of code.”
The second plan covers users of centralized exchanges and their custodians.
The $NXM token is a governance token.

Cover Protocol

Launched: January 2021
MC: $40,400,000
Token: $COVER
Traditional Products: No
Autonomous Claims: No
Token Use-Cases: 2
Products: 1
DeFi Application: Liquidity Providers can earn tokens for coverage markets.

Cover Protocol allows DeFi users to be protected against smart contract risk.
Cover Protocol provides peer to peer coverage with fungible tokens.
The market sets coverage prices as opposed to a bonding curve.
The COVER token is a governance token.

Etherisc

Launched: January 2021
MC: $57,400,000
Token: $DIP
Traditional Products: No
Autonomous Claims: No
Use-Cases: 3
Products: 1
DeFi Application: Staking

Etherisc is a protocol to collectively build insurance products.
Decentralized Insurance Protocol provides a permission-less, generic mechanism by which risk of any kind can be priced, serviced, and transferred by a group of independent service providers – without having to rely on centralized parties.
Tokens are used to earn transaction fees (% of insurance premiums or fixed cost).

Nsure.Network works like an insurance company that is governed by Nsure stakers.
Nsure’s insurance is based on a vote-based Dynamic Pricing Model.

Polkacover

Launched: January 2021
MC: $4,500,000
Token: $CVR
Traditional Products: Yes
Autonomous Claims: Yes
Token Use-Cases: 11 – Policy Purchase, Policy Discounts, Cross-Border Policy Issuance, Claims Payout, Referral Fee / Product Reviews/Survey Forms, Fast Claims Incentive, Data Sharing, P2P Policy Issuance / Claims, Manual Policy Quotes
Products: 2
DeFi Application: Staking, Discounts, Rewards

Incentives through Token Purchases
Discounts through Token Purchases
P2P Insurance for Developing Markets
24/7 Availability
Real-time Transactions
Transparency of Information
AI-Based Automated Claim Validation
Audit Trail
Full Transaction History
Governance through the Use of Multiple Smart Contracts

Key Differences

Polkacover is building a one-stop-shop insurance marketplace – providing BOTH traditional & decentralized insurance products.
The Polkacover team has extensive experience in the traditional insurance industry.
Polkacover offers insurance products from several providers – not just one.
Polkacover is built on the Polkadot ecosystem, which allows for efficient gas-usage and scalability.
The Founders of Polkacover have actively been working with Multi-National Insurance digital Financial Services providers & large claim administrators for over ten years in senior leadership roles.

Recently, the leading cryptosecurity firm, Hacken, released the findings of the audit on Polkacover. The audit conducted was to test the smart contract for code & functional review vulnerabilities and was cleared of any risks or vulnerabilities in Polkacover’s smart contract.

Polkacover has four main roles it would fulfill within the insurance space; the platform will be developed in four phases:

Phase 1 – Polkacover Crypto Protect (Crypto Insurance Products)
Phase 2 – Global Insurance Marketplace (www.covercompared.com)
Phase 3 – Polkacover P2P (P2P Insurance Platform & Providers)
Phase 4 – Autonomous Third Party Administration / Claims Management for Insurance Companies

“Our vision is to align insurance purchase with the core principles of decentralized technology to be able globally accessible to everyone while offering a censorship-resistant platform and build open-source technology governed by software and controlled by its users.”

Conclusion

As the crypto insurance market evolves with the entire cryptocurrency-space, along with DeFi, at an accelerated pace, the insurance industry as we know it is undergoing a complete transformation. Much like how the traditional banking industry has been forced to adapt to the cutting-edge blockchain technology – or suffer the same fate as the countless businesses that failed to adjust to the changing times. As more competition is expected to flock to the crypto-insurance industry in the coming years and decades, a significant share of the market is currently up for grabs to providers that can offer plans that provide coverage in many scenarios, and not just one or two.

As with any industry, different companies serve different purposes to fill various needs for consumers. While the need to provide several insurance providers becomes more apparent to the crypto-insurance industry, Polkacover aims to be an inclusive insurance platform that welcomes other insurance providers to band together and serve customers in the most cost-efficient and time-efficient manner. The first-mover’s advantage is undeniable in the crypto markets, and it shouldn’t be ignored. Neither is the accelerated shift of traditional industries flocking to blockchain technology, which includes the insurance sector. As DEX participants and exchanges continue to increase exponentially, there is no doubt the need for decentralized crypto-insurance providers will also increase.

Polkacover looks to be the trailblazer of the crypto-insurance industry as the only platform capable of autonomous claims-processing based on AI and machine-learning – while offering multiple insurance partners in multiple countries. Welcoming other insurance platforms to join Polkacover to provide the most coverage to the masses only solidifies how Polkacover is truly “trying to give power back to the people”. With an impressive list of backers and an experienced team from the traditional insurance sector supporting the platform, Polkacover’s decentralized services offer unparalleled security, deeper discounts, increased selection, rewards, and more transparency – than ever before. With so much attention being paid to Bitcoin, DeFi, and Polkadot, Polkacover looks like it has the exploding crypto industry and future crypto-enthusiasts fully-covered.

Important Links

Telegram: https://t.me/Polkacover

Twitter: https://twitter.com/Polkacover

*Disclaimer – Polkacover is our Media Partner, and this content is made possible with their support. The above article does not represent financial, investment, or trading advice, and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.