When we explore the history of the cryptocurrency industry, we will see that it is flooded with a lot of hacking incidents. Hacks or thefts often occur in this field. Cryptocurrency exchanges provide protection to their clients and their funds. Despite their protection, hackers manage to get their hands onto the funds of users.
However, Nexus Mutual, famous decentralized finance (DeFi) coverage protocol, has brought a solution for providing protection to the users of these centralized digital currency exchanges. The DeFi protocol has expanded its insurance coverage offering from decentralized finance exchanges to centralized cryptocurrency exchanges.
As per an official announcement made recently by Nexus Mutual, the company said that it has rolled out a new product known as “Custody Cover” in order to provide cover protection to users of centralized digital currency exchanges. As part of this new product, the insurance protocol will allow users to purchase custody cover from this platform. The company said that it would provide cover protection in two case scenarios.
In the first case, it will cover users if the respective custodian goes through any hacking incident, as a result of which users face a loss of around 10 percent of their funds. In the second case, it will cover users when their custodian suspends withdrawals’ service for the duration of over 90 days. Users can claim covers when they are stuck in these two situations.
The company stated in the announcement post that as the new offering is for centralized crypto exchanges, it plans to initiate with major digital currency exchanges. These include the world’s leading crypto exchange by market value Binance, the San Francisco-based crypto exchange platform Coinbase, Winklevoss Brothers’ owned cryptocurrency exchange Gemini, and the United States-based digital currency exchange Kraken. Nexus Mutual will offer cover protection to the users of all of these crypto exchanges.
Now the users of these big crypto exchanges can tap Nexus Mutual for insurance coverage. And there is no need for them to rely on their respective crypto exchanges for this purpose.
Prior to expanding its insurance coverage to centralized finance (CeFi), Nexus Mutual is already offering this service to exchanges in the decentralized finance (DeFi) space where the chances of hacks or fraudulent activities are more as compared to CeFi.