Ethereum is as we know it, the second largest blockchain worldwide. To bring bank account-like protection to its users, two ethereum startups have teamed up. Insurance cooperative Nexus Mutual and wallet provider Argent in a bid to keep Argent users’ funds safe from hackers, plan to offer a combination of smart contracts and insurance.
The need for the smart contract is in its design that prevents thieves from draining a wallet. This is achieved by temporarily freezing transfers above a daily spending limit to addresses that aren’t on the user’s white list. In an occurrence of a frozen transfer, the user is alerted and can cancel within 24hours if authorized by them. This can be likened to a bank’s notification to an account holder against card fraud or similar suspicious activities on an account.
In the other vein, the presence of insurance in their plan covers for instances where the smart contract fails to do its job. The team is forming a fund that would insure its members against such losses. Users would have to stake Nexus’ NXM tokens in order to participate hence guaranteeing their reward that would be even more significant in event of losses. Similarly, policyholders of a mutual insurance company receive dividends on their capital. And also, when claims are paid, it comes out of the staked tokens. Some sort of Win-Win situation.
Argent co-founder Itamar Lesuisse said: “We are thinking about not just crypto users but also new users – and so the end goal is to repeat what they get from their bank,”
Nexus founder Hugh Karp stated, “In general, what we are trying to do is provide cover to the crypto community when it can’t access it via the normal means,”
Bearing in mind that a cryptocurrency is a form of cash, once it’s stolen or lost, it cannot be recovered; the smart contract ‘freeze decoy’ and insurance backup is definitely innovative. Lesuisse said Argent would proudly be first in line to utilize this Cutting-edge protection for users of the wallet; they will stake NXM against the wallet’s own smart contracts. “We want to show people that’s how confident we are; we are staking ourselves,” Lesuisse said. The smart contracts and insurance combined product went live last week.
Credits- Ian Allison
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