In brief

  • Singapore-based InsurAce raised $1 million in a seed round led by Arthur Cheong of DeFiance Capital.
  • Its insurance product protects investors from hacks by creating a portfolio of DeFi projects and providing blanket coverage.
  • The insurance is expected to be available starting in December.

A massive rise in hacks accompanied the exponential growth of  DeFi’s Total Valued Locked this year—nearly $100 million was filched by hackers since January, according to Ciphertrace. And that excludes the $20 million hack of Pickle Finance reported this weekend. Singapore-based  InsurAce Protocol believes it can help.

A new type of decentralized insurance platform—with its own token— InsurAce wants to protect DeFi farmers from those hacks. Arthur Cheong, one of the earliest DeFi investors and famous for his thesis on combing fundamentals research and active participation in DeFi investment, led a $1 million seed round via his firm, DeFiance Capital. InsurAce is DeFiance’s first insurance primary investment.

“We are excited to support InsurAce because,  just like traditional insurance, the protocol combines both investment and insurance into one single protocol.” Cheong told Decrypt. “We are excited to lead InsurAce’s seed round and support them in building an innovative decentralized insurance protocol to complement the exponential growth of DeFi space now.”

A new kind of DeFi insurance


The service expects to launch in December.

Also participating were ParaFi Capital, Huobi DeFi Labs, Hashed, Signum Capital and Lunex Ventures. DeFiance Capital, also based in Singapore, contributed $500,000 of the seed investment.

Compared to existing decentralized insurance protocols such as Nexus Mutual where degens have to buy coverage each time they farm a new protocol, InsurAce packs all the protocols into one portfolio. The idea is that now, users can just buy once and get everything insured.

“There are two advantages of our protocol,” Oliver Xie, founder and CEO of InsurAce told Decrypt, “first of all, our protocol is more user-friendly and flexible because of the portfolio-based approach. Second, as we cross covers among protocols in the portfolio, our premium is much lower than the others.”

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Oliver Xie, founder and CEO of InsurAce

Similar to traditional insurance companies, InsurAce has both an insurance arm and an investment arm. “We are using the free capital from the insurance side, and invest in those low-risk strategies,” Xie said. The goal is to generate reliable yields and further reduce the cost on the insurance side.

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An insurance token

Another major difference between InsurAce and incumbents is its wallet-based accessibility, which means that users can access its service without KYC, removing another layer of hurdles for degens to get insured.

The protocol will also be launching its liquidity mining program “SCR (Solvency Capital Requirement). Participants can earn the InsurAce Token (INSUR) by staking into the insurance and investment pool. The program aims to bootstrap the capital pool, cover capacity, and investable capital when the protocol is launched.

It’s not clear how decentralized, if at all, InsurAce is other than its INSUR token being served as a governance token. Xie expects that future processes such as claim and investment decisions will be facilitated by its governance token.

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