LI.FI Collaborates with InsurAce for “Bridge Insurance” Protection

04/19/2023 16:58 • Tech Ticker • 119 views

According to reports, LI.FI is collaborating with InsurAce to develop “bridge insurance” to provide protection for hackers, malfunctions, and vulnerabilities, otherwise it will deplete users’ funds. According to the agreement documents, InurAce’s products can protect losses caused by “slip point errors” in decentralized exchanges participating in transfers.

LI.FI and InsurAce collaborate to develop insurance tools

The emergence of blockchain technology has provided new opportunities for individuals and businesses alike. Blockchain technology offers a whole new dimension for the exchange of goods, services, and assets – without the need for intermediaries. With the ability to transfer funds across borders, provides transparency and security for all transactions. As a result, decentralized exchanges have become the go-to platform for many investors, traders, and users alike.
However, with the benefits of decentralized exchanges comes a significant risk. Hackers are always one step ahead, and the slightest vulnerability can lead to significant losses. This is where the need for insurance becomes essential, especially for cryptocurrency investors. Therefore, LI.FI has collaborated with InsurAce to develop “bridge insurance” to provide protection against hackers, malfunctions, and vulnerabilities, otherwise, it will deplete users’ funds.

What is “bridge insurance”?

LI.FI has developed technology that utilizes visible light communication to transmit data. It is a groundbreaking technology that offers a new dimension in wireless networking. Decentralized exchanges can utilize this network technology to enhance their transactions’ speed and efficiency. However, with cybersecurity threats always imminent, users face substantial risks. The emergence of “bridge insurance” has addressed these risks, providing protection against a series of issues like lost funds, slipped transactions, and other vulnerabilities that may expose losses in decentralized transactions.

The collaboration between LI.FI and InsurAce

According to the agreement documents, InsurAce’s products can protect losses caused by “slip point errors” in decentralized exchanges participating in transfers. LI.FI collaborated with InsurAce to provide insurance coverage of non-custodial transactions. The innovative idea is to provide decentralized exchanges’ users protection similar to those provided by centralized exchanges. With this agreement, LI.FI aims to reduce the risks users face when participating in decentralized transactions significantly. The collaboration’s primary aim is to provide very high coverage (up to $1 million) for users in case of losses that are beyond recovery due to vulnerability exploitation.

Why is “bridge insurance” essential?

Decentralized exchanges introduce a high level of risk to transactions, as they do not have a central point of access control. Therefore, the risk of hacking and slippage of funds is higher than normal. Traditional insurance policies do not adequately address these risks. The conventional insurance coverage has gaps that expose users to a higher degree of loss. As a result, the introduction of “bridge insurance” in transactions can potentially provide a safety net against significant losses. This insurance will bring more confidence to users and investors, increasing the number of people using decentralized exchanges.

Conclusion

The collaboration between LI.FI and InsurAce marks a turning point in the insurance industry associated with cryptocurrency trading. With the introduction of bridge insurance in dex trading, insurance companies are now offering policies tailor-made for the unique risks faced by dex users. These policies will help users to mitigate these risks and can offer an additional layer of protection against unforeseen events. However, as with any type of insurance policy, it is crucial to read and understand the insurance policy’s terms and conditions adequately.

FAQs

What is Dex trading?

Decentralized Trading (“Dex”) is the Next-Generation peer-to-peer trading platform that allows you complete control of your funds.

What is a “Slip point error”?

A Slip point error is a malfunction that occurs during decentralized transactions due to vulnerability exploitation.

How does “bridge insurance” differ from traditional insurance policies?

Bridge insurance policies provide coverage tailor-made for decentralized exchanges’ unique risks, offering an additional layer of protection against unforeseen events.

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