Update (August 4 at 2:20 p.m. UTC): This article was updated to add comments from Phil Johnston, Marketing Director of Nexus Mutual.
Alternative crypto-native insurance Nexus Mutual reimbursed customers who had lost money in a recent Arcadia financial hack.
According to an advertisement shared on Monday with Cintelelelegraph, Nexus Mutual reimbursed around $ 250,000 to users who have lost funds in Arcadia finance hacking. The protocol was hacked in mid-July for $ 3.5 million in USDC (USDC) and USDS on the basic blockchain, with stolen assets exchanged to wrap Ether (Weth).
The attackers siphoneed the funds directly from user accounts. Arcadia users who lost funds began to file complaints on July 29 after a 14 -day recharge time. In partnership with OpenCover, a coverage seller based on the basis, Nexus Mutual has provided $ 250,000 in reimbursements to date.
“A zero risk does not exist outside the chain, and there will be no onchain,” said Jeremiah Smith, CEO of Opencover. He added that decentralized finance insurance (DEFI) considerably changes industry status:
“Arcadia payments are not only to make users full, they are proof that DEFI is ready.”
Phil Johnston, Marketing Director of Nexus Mutual, told Cintelegraph that payment has no impact on business solvency or its ability to pay other complaints. “We have more than $ 100 million on active coverage,” he said.
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The Onchain insurance model accelerates payments
Nexus Mutual maintains a history of transparent claims and allows its access verification. Since its creation in 2020, the service would have paid $ 18,256,181 of complaints to its users.
Unlike traditional insurers, which often take months to resolve complaints, Nexus Mutual says that most valid complaints are paid within seven days, thanks to the transparency and verifiability of blockchain data.
“Too many people have had a bad experience in the traditional insurance complaint process, and we are here to show that there is a better way,” said Hugh Karp, CEO of Nexus Mutual.
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The risk of an intelligent contract is still looming
Although DEFI eliminates the risks linked to childcare intermediaries, it introduces new vulnerabilities in the form of complex intelligent contracts, often with significant attack areas. Due to the complexity of onchain systems, it is easier for critical vulnerabilities to go unnoticed until it is too late.
A recent example is the hacking of the contract for the implementation of Superrare tokens (rare), which occurred at the end of July and led to a flight of about $ 731,000 of rare tokens. Cointelegraph’s analysis revealed that a vulnerability in the intelligent contract – a sloppy access control control – has enabled anyone to modify the user’s sales on contracts.
According to the mutual announcement of Nexus, the feat of Arcadia highlights “the inherent risks associated with decentralized finance”. However, investors can now take advantage of insurance to mitigate these risks, which, according to the company, makes space more accessible:
“Nexus Mutual offers in-depth coverage against exploits of intelligent contracts and related risks, allowing avant-garde institutions and sophisticated investors to allocate capital in all confidence in the DEFI landscape.”
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