Happened in crypto: Decentralized finance (DeFi) is facing the opportunity of the decade

Jiří Makovský

Have you wondered whether to insure your cryptocurrencies against hacking, theft or company collapse? If so, you're far from being alone! The insurance business aspect can become one of DeFi’s future drivers.

No matter if smaller projects or the largest cryptocurrency exchanges in the world -- everyone out there is working on damage control and covering losses. For example, Binance has established a special fund just for the purpose of protection against potential hacks of the platform.

You can read about this and much more from the world of cryptocurrencies in our article today!

Binance converts all USDC on the platform into BUSD issued by the exchange

Major industry name Binance has decided to convert all USD Coins (USDC) to the platform’s very own Binance USD (BUSD) instead. Both are stable cryptocurrencies pegged to the US dollar. This exchange is about to take place automatically on September 29, 2022.

USDC is currently the second largest stablecoin and the fourth largest cryptocurrency in terms of market capitalization. According to a press release, Binance just wants to unify liquidity and streamline trades. However, critics point out that this is rather an attempt to eliminate the competition. As of now, BUSD is one spot behind USDC in the ranking of cryptocurrencies, though this position will likely change with the upcoming conversion.

XRP Ledger (XRP) faces problems with centralized wealth

XRP Ledger (formerly known as Ripple) is the network on which the XRP cryptocurrency operates. The goal of blockchain is to offer financial institutions swift international transactions. In this case, the developers of the project clearly hold the power, therefore it cannot be considered a decentralized coin.

This is now proving to be a big problem for investors and traders. XRP currently roams around the seventh place, but only a few years ago it was the second largest cryptocurrency by capitalization. Such a drop is a consequence of the centralization of wealth, which is truly extreme within the XRP Ledger: just the 10 largest wallets hold 73% of all XRP! No one wants to have anything to do with such overgrown whales. 

How to protect yourself from cryptocurrency theft? Blockchain insurance may offer the answer

It's no secret that cryptocurrency theft is a big problem for our industry. In 2021, criminals managed to snatch an incredible 3.2 billion dollars. This is a sixfold increase compared to 2020. There is no sign of the trend slowing down, quite the contrary. Widespread adoption of crypto technology worldwide brings an increasing number of easy-to-manipulate newcomers and potential victims of various scam practices. The data is based on the analysis of the company Chainalysis.

The situation is unsustainable in the long term. That is why there is a fierce debate in the decentralized finance community about the possibility of insurance against the theft or loss of virtual assets. The collapse of companies such as TerraUSD definitely added up to the conversation as LUNA and UST cryptocurrencies became basically worthless within a few hours.

Today only the funds of large institutional players are insured. That's roughly a mere 1% of the market.

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