Top Decentralized Insurance Projects to Watch in 2021

Jan 15, 2021

Top Decentralized Insurance Projects to Watch in 2021

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Insurance is the buffer between a policyholder suffering complete (or substantial) financial harm when they lose something of value through theft, or if it suffers a decline in value. When it comes to decentralized insurance, platforms and policy types serve several specific purposes. 

Intermediaries dominate traditional insurance. These intermediaries go by names like GEICO, State Farm, and Nationwide. These companies provide invaluable services to those who wish to insure their homes, cars, savings, and even their lives. Health insurers also play a vital role in the traditional insurance landscape.

Decentralized finance has created a need for new forms of insurance, as well as new twists on old forms of coverage. Large crypto stakes can be stolen or may diminish in value within minutes. Smart contracts may contain unforeseen bugs, rendering any funds that they contain forever inaccessible. These risks require fresh forms of insurance. 

Additionally, players in the decentralized insurance space are providing democratized versions of traditional insurance. They now allow protection to be provided on a peer-to-peer basis for events such as hurricanes or illness with no major corporation in between. Various incentives allow these decentralized insurance platforms to sustain themselves.

Several projects are stepping up to the plate by insuring cryptocurrency holdings and providing other types of insurance in a decentralized way, and their progress is worth tracking throughout 2021.

Cover Protocol

Cover is a “peer-to-peer coverage market” that allows market players to set both the premium for coverage and to provide the coverage, making it a decentralized framework for crypto insurance. The Ethereum blockchain powers the smart contracts that facilitate the Cover Protocol.

The protocol is not just for crypto coverage, but for “anything”—so long as someone is willing and able to provide the coverage, the Cover Protocol will facilitate the contract. 

Nexus Mutual

Nexus Mutual is an insurance platform aimed specifically at providing coverage for smart contract failure. Users can buy NXM tokens to provide coverage (and potentially reap rewards as owners of Nexus Mutual). By pooling risk through the purchase of NXM tokens, the Nexus Mutual framework eliminates the need for an insurance company.

Nexus Mutual cites events like the DAO hack and bugs in the Parity Multisig Wallet as the sort of events that it provides insurance for.


Etherisc is a decentralized insurance protocol through which communities can build and fund insurance products. The protocol remains in its early stages, but boasts that users of the Etherisc platform have designed, prototyped, or licensed, products that provide hurricane protection, flight delay insurance, crop insurance, crypto wallet insurance, insurance for death or illness (social insurance), and other types of insurance.

The Etherisc protocol uses the Ethereum blockchain and provides value to those who service the protocol (claims adjusters, product designers, etc.) through a cut of premiums paid by customers. 


Opyn is a platform for buying or selling risk protection against a decline in the value of various cryptocurrencies. Users can choose to purchase various bids from other users providing protection with specific terms. Some of the tokens for which one can purchase or sell insurance through Opyn include ETH, DPI, UNI, WBTC, YFI, USDC, and DAI.

Developers can also offer built-in protection options for users of their DeFi project using Opyn. The platform suggests that coverage through Opyn could be particularly valuable in the case of flash crashes, and explains that users can redeem their policies at any point through Uniswap.


VouchForMe operates under the tagline “if your friends trust you, we trust you”. It is a fitting mantra for a platform that allows users to purchase insurance protection in pools, mitigating their collective risk while reducing the overall cost of insurance premiums. The platform is essentially based on friends vouching for (i.e. serving as guarantors for) each other in return for tokens. 

If their friend does not pay their premium, then the guarantors (or friends) will be on the hook. The guarantee that a friend will step in and pay the premium if the policyholder defaults is enough to earn the policyholder a discount on their premiums. The VouchForMe platform is blockchain-based and decentralized.


Guardtime is an enterprise blockchain solutions provider which operates in the spirit of decentralization. The company deploys blockchain for a variety of purposes, and one of those purposes is the digitalization and automation of commercial insurance. 

Insurwave is a product that Guardtime launched in 2018 in combination with partners Ernst & Young, Microsoft, Willis Towers Watson, and others. Its purpose was niche: insure marine hulls for commercial vessels. More importantly. Insurwave was a test for how distributed ledgers and blockchain technology would provide value in the commercial insurance industry.

Though Guardtime has centralized leadership, and so is not technically a decentralized operation, it is possible that Guardtime eventually launches fully-decentralized projects in 2021 or later.


FidentiaX is another centralized platform for insurance, but like Guardtime is one that uses blockchain as a central feature of its operations. For this reason, it is worth monitoring whether FidentiaX chooses to offer a fully-decentralized arm of its core product in 2021.

For now, FidentiaX offers users the ability to sell their existing insurance policy, to invest in insurance policies as a means of diversification, and to tie their existing policies into a single ledger using FidentiaX. Blockchain allows users to tokenize their policies (for sale or purchasing purposes), and ensures that records created and stored on FidentiaX are immutable and transparent.


B3i is the acronym for the Blockchain Insurance Industry Initiative. Though it is decentralized in the sense that its ownership is shared among 20 global insurance industry stakeholders, it is not decentralized in the same way that other projects on this list are. Still, B3i uses blockchain technology to power its operations, which is why it is included on this list.

Using decentralized ledger technology (DLT) which is part and parcel of the blockchain, B3i allows insurers to hedge the risk that comes from Property Catastrophe Excess of Loss (Cat XoL) (massive catastrophic events). Blockchain technologies facilitates the negotiation and recording of these reinsurance agreements between B3i and its customers.


Teambrella is a blockchain-powered insurance platform that enables “teams”—community insurance pools—to cover each others’ losses. The pool of participants in a pool discuss and vote on every decision, such as whether to pay for a team member’s claim and, if the claim is paid, how much compensation to provide for the claim. This model fits the decentralized mold in that it removes the insurance company from the equation and relies on community participation for decision making.

Teambrella currently has four pilot teams with plans for two new teams to launch “soon”.

Bridge Mutual

Bridge Mutual uses a “decentralized, discretionary insurance platform” to offer users coverage for their stablecoins. Users can also acquire insurance or insure other users’ stakes in exchanges or smart contracts. This is the peer-to-peer, decentralized insurance blueprint that is the most common framework for decentralized insurance platforms. 

It is a new product (launched in November 2020), and so it is worth seeing if Bridge Mutual has staying power in the DeFi insurance space.


So long as there is risk, there will be a need for insurance. Without insurance, life can become akin to a continuous game or roulette, and few people have the stomach for such games.

As the decentralized finance sector continues to grow and investors sink larger and larger stakes into cryptocurrency and other DeFi projects, the need for viable insurance products will prove increasingly great. As decentralized insurance products display long-term efficacy, one question may loom larger and larger: why, exactly, do we need large insurance companies?

For now, traditional insurance companies provide greater certainty than decentralized alternatives. They have more resources, a more proven track record of paying claims, and greater liquidity pools. 

Could decentralized insurance eventually provide enough value to its policyholders and liquidity providers that they are willing to forego the costs that traditional insurers charge for their services?

This question alone makes the decentralized insurance sector worth monitoring in 2021 and the years to follow.

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