Blockchain
Cross-chain crypto bridge aggregator LI.FI on Tuesday rolled out an insurance tool that it says will protect its users against the risks of moving their assets between different blockchains.
LI.FI is working with the InsurAce on “Bridge Insurance” to offer coverage for hacks, malfunctions and exploits that would otherwise drain users’ funds. InsurAce’s product protects against losses caused by “error in slippage” on decentralized exchanges involved in the transfer, according to protocol documentation.
Insuring against bridge failures could offer a reprieve to users who lose their funds in some of crypto’s biggest hacks, like the Ronin exploit. That exploit and others have ranged into the hundreds of millions of dollars. Insurance coverage is the financial protection that is provided to an individual when an unexpected loss occurs, like an exploit that drains a protocol.
LI.FI and InsurAce’s offering is nowhere near that level yet. At press time, the tool said it covered around 130 transactions, some $15,000 in value across eight different chains. The starting amount for the bridge cover fund currently stands at $200,000. “As a brand new product, we’re starting small and will increase capacity regularly to fit demand,” said InsurAce to CoinDesk over Twitter.
