The Biggest Problems the Insurance Industry Faces in a Web3 & DeFi World, Part 1: Oracles
The world of DeFi is in its infancy. There is a strong argument for prioritizing being first to market over having a perfect model before launching. Just look at Bitcoin — over the years, there have been multiple new coins created that are arguably more technologically advanced than Bitcoin, but it still reigns king.
Insurance is no different. Multiple DeFi Insura nce start ups have popped up over the past few years, each bringing their own unique ideas to the table, however each exhibiting their own flaws as well. Most of these start ups are transparent about these issues. You’ll see phrases such as “this division of our business is currently centralized, but we plan to decentralize it in the future”.
The bulk of these issues exist not because of resource constraints, but rather there isn’t a great solution for them yet. In this article series I will explore major issues that DeFi Insurance companies will have to solve to become the dominant players.
The promise of the Blockchain, and more specifically Smart Contracts, is that “Code is Law”. There is no room for human error — when you sign a Smart Contract, you have the entire code laid out in front of you, so you know exactly what you’re getting.
