DeFi Insurance Payouts Soared to $34.4M in 2022 According to OpenCover Report

Ninety percent of all DeFi insurance payouts since inception were paid out in the year 2022, as per a recent report by OpenCover, a global insurance company. This news comes as a boon for DeFi investors as insurance policies will help to reduce the risks associated with investments.

OpenCover surveyed several decentralized finance (DeFi) platforms to get an in-depth understanding of their operations. It summaried the insurance claims and payouts made since 2012. According to their results, the payouts amounted to a whopping $34.4 million in 2022.

Cryptocurrency investment is largely a derivatives-based market with high volatility. Insurance helps to bring down the risk by taking it into account. Reports such as that of OpenCover can bring transparency in the system, and increase investor trust.

OpenCover also revealed that the total volume of DeFi investments had grown significantly over the years. It noted that investments reached a peak of $3 billion in 2022, because of a host of new DeFi projects.

The report further added that the percentage of insurance policies has also increased over the years, a stark contrast to the actual volume of investments. This could be attributed to the fact that the investor audience is becoming more knowledgeable. Thus, they are opting for more secure ways to protect their capital.

According to OpenCover, such reports are also extremely helpful for the DeFi community, as it helps to identify cases of insurance fraud. This can be done by monitoring the payouts as well as tracking the policies for any irregularities.

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