How Steady State Will Revolutionize Insurance for the DeFi Industry

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Risks such as flash loan exploits, hacks, and stablecoin de-pegging are a serious deterrent for DeFi adoption. Now Steady State is seeking to push DeFi out of the “fear zone” by insuring funds held on decentralized protocols.

Insurance for DeFi
Steady State is launching a comprehensive insurance solution for decentralized finance (DeFi). The project shifts responsibility from individual users, and the protocol holding the underlying assets, and transfers that responsibility to Steady State insurance. Theoretically, this should allow all parties to sleep more soundly at night.

Decentralized finance in its current form can never fully realize its potential: the risks from flash loan exploits, hacks, and stablecoin de-pegging mean that a large swathe of potential investors will simply never venture into the market. Any cursory examination of the sector makes it easy to understand why that is.

A single flash loan attack in February of this year drained $37 million from C.R.E.A.M. protocol tanking the price of its native token by 30% in half an hour. In May, flash loan exploits on a single chain, Binance Smart Chain, totalled $167 million. These sorts of reports effectively place a handbrake on the market, slowing its growth and making bigger investors and institutions turn away.

Without the additional safety that an insurance solution such as Steady State can provide, the growth of the sector will always remain underwhelming. source