DeFi by Design EP#61: InsurAce As A Core Building Block To DeFi

Transcript

welcome to d5 by design where we talk all things blockchain and cryptocurrency while striving to educate empower and enrich it's your boy andy and welcome back to the defy slate youtube channel smash the like button on this video that really helps us out and sit back and enjoy the content thank you very much what's going on guys welcome to episode 61 of the d5 by design podcast um beautiful day out here today looking forward to chatting about what's going on in d5 in terms of risks insurance what is is being built for the institutions to come and steal all of our yields how we can protect them from getting rugged like mark cuban did which as a matter of fact mark cuban came in and talked about d5 for like three

months straight got rugged for like 75k which is like pennies to him and then left and now is a crypto hater so we need to be able to stop that from happening and be able to protect our investors um you know we do a lot of that here at d5 state with our education you know we we promote a lot of quality products um i think there's only maybe been one project that we've been uh interacting with that's actually had a really really bad outcome so we have a pretty good track record here um and i think that's a big part of it and then another big part of it is uh using that education to uh you know build protocols like insurance who we have on today with dan who protect crypto investors uh with effectively smart contract insurance and

other risks uh insurance so today we're gonna talk about what the risks actually are in d5 um you know what they are how you can protect yourself from them uh some of them pick some of the good parts and bad parts of the current insurance protocols in d5 kind of the evolution of d5 insurance um yeah and what's going on at insurance what dan's building and kind of his vision for uh building a more protected defy ecosystem while maintaining the openness and transparent uh you know architecture that make it so powerful excited today of course here with rob as well uh and dan so let's kick it off rob uh and get started yeah man yeah i i i see the decentralization decentralized nature of

uh d5 and cryptocurrency as uh kind of opening a new world for insurance uh how insurance kind of spreads the risk um across uh you know multiple market participants rather than concentrating it uh in someone uh this risk is kind of transferable uh and even more so and in more creative ways with smart contracts um so i'm i'm keen on kind of hearing more uh from dan on on how ensuring spreads risk um and ultimately makes defy safer for everyone participating on chain so i'll kick it over to dan and let him introduce himself and everything going on over at insurance sure thanks guys thanks for having me um i'm dan thompson the uh cmo at

insurance dio uh the d5 insurance protocol uh we have been going since about april last year when we launched our main net onto the ethereum network and since then have deployed on binance polygon and avalanche today we now cover 15 different public chains and at least 95 different protocols on those chains so one of the fastest growing deep insurance protocols having covered over 200 million worth of assets in the last nine months um and it looks like this year is uh is going to be you know even even better than that so it's been it's been rapid growth it's been a crazy sort of nine months uh since our launch um

yeah i mean to sort of go through the basics of um how d5 insurance actually uh works is that exactly that it's a decentralized form of the traditional insurance model where you have a significant capital reserve backed by a decent decentralized community of stakes miners capital reserves premium returns and investment returns which is then used to collateralize the um the the risk against any sort of losses incurred in your d5 activity so for example if you were to have let's say a hundred thousand dollars uh in a particularly tasty

uh uh beefy finance vault earning your very happy you know 30 40 50 maybe a couple hundred percent ap wise you know you come to us for around 2.8 2.9 apy and ensure that risk against smart contract hacks bugs vulnerabilities um and any other losses like that we can go one step further you could take something like anchor protocol on terror earning your nice happy 20 uh 19 20 returns returns on your usc stable coin so a fairly you know decent return given the fact that in a traditional savings account you're probably getting half percent at the moment so you're getting your 20 and you come to us and the two risks there are the ustd pegging or and the anchor

protocol itself getting hacked so you've got um you know dpeg event and a smart contract volume really to them and those two could be insured together for around four percent so you're still walking away with 15 16 ap y pretty much fixed guaranteed return in a crypto investment which uh you know for us little d gens sounds small but uh the big institutions who are looking at you know uh one two to seven percent you know suddenly get up to 15 16 guaranteed fixed returning crypto is is gold dust yeah that'll rock anybody sucks off who's above the age of like 35 without any d5 experience um especially the insured part i mean that's like we have we we have a lot of

people who are interested in d5 and they're particularly interested in the stable coin yields that's like you know that's what people are like really passionate about who aren't you know really too interested in investing in like the upside or taking the downside and um they're always like you know what's the risk what's the risk but we basically have insurance i mean you can never say no risk um but you know you're able to cover your ass kind of and i mean that that's that's that's like the next step for d5 is making it um you know uh up to par with almost like the fdic if you will uh type of insurance so um you touched on two main risks briefly there i'd love to kind of hear your list of like the most common risks or reasons for exploits in d5 um you know just

maybe just a brief explanation of some of the more prominent ones sure um so yeah i mean the main one we cover is smart contract vulnerability this is if there is a bug or a hack on a particular smart contract that siphons off your funds from your essentially your your wallet account and your state's uh and your staked funds in that particular protocol that siphons off to a different wallet address um that'll be the main one the obvious other one is the the smart contract depending event which is if a particular stable coin as we know they fluctuate slightly um happens to lose more than say again depends on which one we're looking

at more than 11 12 over a 10-day average period so it you know that those two are the sort of main events that we have and these are you know these are two specific events that uh we currently cover uh however you know you're right one of the biggest risks well one of the biggest concerns for a lot of biggest investors coming into the space is the risk of um you know any sort of vulnerabilities in in code in everything like you said earlier from getting rubbed um so there are a lot of different aspects that we are also working on and towards and a lot of other insurance protocols are working towards as well everything from nft insurance i mean we saw the the

accidental sale um on the board eight last week for uh uh three or something yeah they mentioned 300 and then they put three and then some bot instantly just within seconds i bought just bought it yeah so i i don't think that would technically be covered but there are examples that you know could be covered uh everything from um flash loan attacks to rug pulls um to private key losses all these down the line are things we'll be looking at doing even market volatility you know so these are all different insurable events that we're working on products to solve at the moment we're focused mostly on smart contract vulnerabilities and bugs and the stablecoin dpeg with upcoming rugby insurance and nft insurance um

and we focus on these because they're a lot more objective it's easy to see you know for a user when they've had this happen to them to show that this has happened you know it's very objective you can see the the code very clearly you can see that your your wallet address versus the hacker wallet address is to get confirmation from the protocol itself this has happened and therefore easy to submit the proof that shows so um it's very easy for the community to vote on whether or not to pay out or not um and i mean the the stats themselves are enormous you're looking at an industry that you know i mean it's defined any given day somewhere between 200 to 300 billion dollars tbl right now which is enormous considering it was

nowhere near about a year ago so the actual growth is insane um and even then you look at the hacking figure so in 2020 the the d5 hacks totaled around 120 million last year alone were three billion lost in hacks in d5 so the space there is you know enormous and when you actually look at the total value that's even insured is somewhere less than two to three percent of the total value locked d5 now a lot of that value is locked in protocols that are theoretically uninsurable um too risky you know just too much value locked in them that's uh not there but you know so it's a huge addressable market for the insurance companies to take care of

and so right now it's just about increasing the adoption awareness that these these solutions are there i mean again most most people in the space right now are happy to ape into anything and just throw money at something and you know all we care about is every last percentage we can squeeze out of every possible game which has been the mentality going for the last sort of like yeah a few years and probably might be for a little bit longer but as we're talking about as these institutions start coming in as these financial advisors do start suggesting safer ways to invest in the space as they start looking at better ways and smarter ways to invest in space we do start to come across you know things like solutions like insurance that do you know really start to like make this

uh a sense well a more sensible investment still in the riskier end but you know there are better ways of doing it and it and one of the biggest concerns for adoption right now is that it's not part of the narrative you know when when any of us look at any new protocol to invest in you know we look at does it have an or does it have an audit does it have a bug bounty does it you know is the team good is the are the investors good behind it you know one of those one of those checklist points should be does it offer insurance and it's not a negative on the protocol itself it's not a you know i don't think it's one of those things that should be seen as a negative oh it's offering insurance it thinks it's going to get hacked it should be look

these guys care about their users they care about security it's just one extra layer yeah and part of that checklist um i think is is being able to have um your team implement all of the things that you mentioned plus some others like having locked liquidity um you know from the start to prevent a rug pulled by the team or you know having the you know you can burn the admin keys right but even though that might give you a little bit less power the you know the multi-sig kind of setup so we've made large strides um you know in terms of teams creating the most optimal um security measures to start and then you pair that with the checklist that you mentioned plus

insurance um you know audits and all that stuff i mean we we really came a long way um but clearly not long enough yet as you've seen so many hacks um have you been a victim of uh of any acts in d5 or any rug pull i mean i'm sure you've been rugged but um any like exploits that are notable or um you know if so i would love to just hear about that experience and i can share one too if you don't have any notable ones because for those of you are our listeners who haven't been rubbed or hacked um it's quite the experience to log into the protocol and just see the thing draining and you're just like well i don't know what to do i don't know which you know which account to remove the permissions from like oh yeah

uh personally i yes won um but i i mean i should have seen that coming it was honestly it was the one of those really stupid investments where you just i just threw in some gambling money just for the sake of like it had a funny name uh there was absolutely you know i just i deserved to lose every penny i put into it so i didn't really worry too much about it but not nothing nothing too heartbreaking luckily yeah and i think someone who uh is entering the space after like the whole meme coin craze doesn't really have the experience of like a lot of these projects are from anonymous founders that are doing it maybe not maliciously but they have the opportunity to be malicious and uh when you know it's a 14 year old in their

mom's basement and they have uh the admin keys to you know a few million dollars on shane that that might just be uh a bit overwhelming and too tempting for them to uh take the proper security measures um and and it happens it happens kind of in the malicious ways which i think are a bit more uh a bit more difficult to protect uh from an insurance standpoint um but then also the vulnerability in the code uh standpoint which we're we're seeing become a less likely and less frequent with with these audits um and we touched on it a bit as far as the the ability to uh cover a lot of these a lot of these hacks i'm curious if it's if it's kind of a one-to-one type of

coverage uh what i mean by that is is you know it's uh let's take the ust and anchor protocol uh bundle if you will and you know call it four percent or so to ensure against that against that vulnerability is there a insurance writer on the other side of that uh you know gaining a four percent apy uh for for writing that coverage and then is on the hook for paying out uh you know if in the case that that vulnerability is exploited yeah so uh now we approach different type of models for the decentralized insurance and that is one and that has been

approached by a couple of protocols so um on the one hand those type of protocols will um offer the uh per protocol insurance so exactly like you were saying you got the insurance customer and then the other individuals decentralized individuals who are willing to assume that risk on behalf of the apis they can get from it from our side sorry excuse let's try and throw a call yeah yeah and maybe this you know ties into the decentralized model and how it it can innovate on on the traditional insurance model yeah so yeah i mean there's i mean that's that's

one approach definitely on the protocol um allowing people to come in and offer you know the um the underwriting against that particular protocol we do it per chain so uh you can for us you can let's take ethereum chain you can drop in us usdt usdc ethereum uh we then sure all those different type all those different currencies you can then basically that the total amount that is staked with us with those different currencies is then spread across the 90 different protocols that we have on the ethereum chain so it's not like your particular exposure is direct to any particular protocol

getting hacked it's actually spread out fairly thinly which means that in the event you know it would take a massive black swan event of you know 10 20 different protocols at full capacity to all get fully exploited with all the wallets um that we are covering um being fully exploited uh to really see a big dent in someone's state of state assets whereas if you're directly staking against one particular protocol and that protocol were to be hacked then yes you are fairly on the hook for it gotcha the the state uh insurance uh is kind of the the backstop uh for for

the insurance uh payouts of these different acts uh relatively what is one of so actually our main main stake assets are things like bnb uh matic uh avax so we do have you know the the bitcoins plus a load of stable coins in there as well so it's not only spread across four different chains it's spread across uh you know six different currencies in each so even even our pools are fairly well spread out so the payouts um you know it's lower risk for from all angles in terms of the actual protocol itself both for staker uh and insurance customer yeah and i think that does point to kind of the decentralized narrative of uh spreading more risk um across the entire

industry and it becomes a safer environment for all um you know in in the traditional world there's kind of these insurance goliaths um and uh they they've been writing this these insurance policies for i guess like a hundred years or if not more um and now in in smart contract and defy uh it lends the opportunity to anyone uh to become an insurance writer and earn some of that interest yeah it's the same issue same issue with um you know big insurance companies and also you know big banks in the day it's uh if you if you follow the money you follow the insurance um levels i mean they're all reinsuring each other and after a while you realize that the actual assets backing the you

know in the event of a dominant effect aren't actually there same as banks you know you can look at your bank account and it can say you've got a hundred thousand dollars but actually they're only keeping twenty thousand reserve the rest is off you know everywhere else being used somewhere so by having it all on chain you know makes it a lot more transparent so users can actually see that their assets are protected and that there is enough of capital available in the event of an event of a payout and everything's you know as transparent as it can be if they really want to look into it got it got it yeah having it on chain is uh is is quite nice i mean i mean we've talked to so many people who are unfamiliar with um you know kind of how on-chain works and

being able to just explain that you can look at everything on chain and see for yourself um you know that makes the insuring part quite a bit easier um than you know doing things behind closed doors um you know and we've seen that with like anytime there's any sort of exploit you always see the ether scan link and you can track where the funds are going and centralize exchanges work to stop really it's a team effort um you know in defunct to make it uh you know even just prominent community members do their best um to you know to step in and try to help stop the transfer of funds and exploits and stuff like that um you know i'm just a little bit curious on your y'all's model for choosing protocols to ensure

um do you care if founders are anonymous or not like what is your vetting process and but in specifically with regards to founders yeah sure so we're extremely public about our risk assessment methodology anonymous teams we do deal with um obviously it's uh that is not a big red flag it because obviously you know d5 is that's that accounts for a lot of teams um but we prefer obviously um public teams uh but we'll still you know deal with teams and look at the code independently um regardless of whether they're anonymous or not so we we do publish our

risk assessment methodology it's worth a look it's akin to a kind of an audit but accounting for teams community investors a few other factors as well gotcha yeah there there's been uh you know i guess more uh frequent um rug pulls in the sense of uh these anonymous founders although the the vulnerabilities it seems more uh you know whether or not the the code has been audited um and kind of getting back to i guess the the instance when when uh you may have been rude pulled or or if it was a hack uh from from one of these meme coins you know is was there any precautionary measures that you could

have taken that that you didn't um or was it really just kind of uh being pragmatic and in uh kind of assessing the risk of the investment you're going into not really anything that can be done to uh you know on the on the protective side of things i mean on my personal example i think there was um nothing i could have done it was uh you know really i really did deserve to lose every penny in that one um otherwise yeah i mean any sensible investor would look at you know the same sort of checklist that you can find online fairly easily look at the team look at the quality of reviews um the community the social media um the quality of the social media accounts you

know if you don't understand the code there's plenty of things you can look into um for us you know we do look at audits even in quality of audits i mean i don't want to name any names but some audits are better quality than others um there's a great sort of there's a couple of resources for for that as well uh there where you can see which protocols well which order which uh auditors have had the most hacks on that on the particular approach schools that they've been through there's resources like define yield apps rect where you can see various information like that so you know there's also d5 safety is a great resource it's very very good quality in terms of the sort of analysis

they do on various projects the better quality we get to you look at like masari reports and things like that um but yeah i mean in terms of you just investing into meme coins on like a really super early stage yes you're expected to try and get some decent returns but at the same time they they are slightly higher risk which is you know you sort of factor that in yeah yeah that kind of brings me to the to the thought of eliminating some of these risks through like permission to d5 almost where you know we we've seen ave launched their ave arc protocol for institutions basically kyc um you know like they have still not custodial and whatnot but

they're really helping them out with like you know their uh you know their uh seed phrases through fire blocks and um you know using the ave code only stuff like that um yeah i'm curious like what your vision is of like permission d5 if that's something that's probably gonna grow over the next few years um you know kind of what you see if you're bullish on it um and just you know how how does insurance insurance kind of fit into that yeah sure so it's all part of a wider safer d5 network right you look at everything from multi-sig wallets that are promoted safe to audits bug bounties insurance even like companies retrieving lost funds sorry

um all the way through to any sort of kyc or aml recording there's a few good identity token projects coming up uh lit is one of my favorite ones sorry um as well as um lit uh lit litantry this is like the century um it's an uh asian-based uh identity identity protocol so essentially the idea would be uh kyc yourself once and then use that identity token across the rest of d5 um as a form of verification of identity and you know uh no longer needing any sort of um kyc everywhere else which you know it's in theory a nice idea

um whether or not it will end up being that is or another one is is still to be seen but we're all working towards a safer space because we want the big institutions coming we want the big money coming in we want people to migrate over from traffic to d5 um and you know by all these different uh integrations and working together you know going full multi-chain i don't think there's gonna be you know one chain that wins out over the others i think multi-chain is always gonna be the way forward there's always new benefits to different approaches a bit of competition and different you know teams building in different ways um but then for us like the biggest step would be integration so at the moment it's a bit not

not too troublesome but at the moment you have your steak somewhere to be auto farmed could be you know alpha hammer alfa hamara you then have to come to us to opt in for your insurance you have to you know be on chain you have to pay for the insurance through our app um selecting how much you want to insurance for how long luckily we have a bundle cover as well so you can choose all the different um your entire bag so you can pick all the different projects your stakes in and ensure more than one go which can save you up to about 60 on your insurance cost and loads on your gas fees if you do on ethereum um but in the future we'd love to we're trying to move towards a sort of a one-click opt-in insurance where it's all done on chain at the point of your

stake you know you can opt into the insurance bill like a you know travel insurance um that pops up when you book a flight uh that would automatically cover you and then beyond that for the protocols themselves to list you know their ap wise a couple of percentage points less and automatically include that um insurance in to the uh into the api coverage so that you're getting covered automatically without even having to do anything it's almost like a zero-click insurance coverage you might be losing a couple of points per se of apy without necessarily knowing it but those funds are automatically being sent over to the insurance protocol um to make sure that your assets are protected yeah and that'll be the future just be simple easy integrated uh insurance

yeah and that that's potentially a community decision uh from the dow of uh you know choosing to to automatically opt in uh from the protocol level into that insurance rather than kind of leaving it up to the user and and even giving the user a chance of uh of losing funds um after checking out d5 safety you know they they provide some some credit rating uh in a sense of some different protocols and and it seems like right off the bat doing something like a zero-click insurance where it's at the protocol level will will boost up um you know the the safety rating of of a protocol um and it seems like that's kind of where we're headed at on the the protocol side as well as the individual

side you know if identity token is the way you know we'll start to see kind of uh credit ratings of individuals on on the uh individual token side of things as well as on the protocol side um and i'm curious kind of how this ties into um the uh the kind of uh i guess decentralized credit score if you will if you think that's kind of a meme or if you think that's really a potential uh solution to kind of the the credit system as it exists today i'll be moving into it into a credit score uh essentially looking at like borrowing and lending against your assets i think it's definitely a much more secure way of doing it whereas the

current credit system depending on where you are i'm guessing in the u.s it's just built on credit right so you can take out 50 different credit cards and you know uh with relatively little leads because they they just want you in debt it's as soon as you look indeed fire it's almost you know it could be used that way but at the same time it doesn't have to be because it's all on chain you can see how many assets you have you plug yourself into something like i know eight board and you can pull up any wallets assets that you know you want to have a look at so would it work in the same way as sort of a credit score i mean possibly uh you can pretty much do it now anyway you just find a wallet address that you you know belong to someone and plug it into

a few trackers and you know put you can pull up their sort of asset score and would you would they be able to borrow against that yeah maybe but that's kind of what these borrowing lending protocols are for um but i think that you know essentially the majority of the traditional finance system is built on lending and borrowing so uh you know it's just about making that as safe as possible for bigger and bigger money to come in yeah we've almost seen uh d5 solve for this already to a certain extent by keeping the lending and borrowing projects over collateralized um yeah yeah yeah to be honest

we've already spun up enough yet and we've already spun up a lot of crazy ponzi nomiks we're on 13 billion percent apy oh so um yeah maybe give it another year or two until we start to get under collateralized loans but with that kind of would would immediately have to come to the credit score that we're talking about um there's a project called right that they're just launching they're doing uh they're gonna be i think they're gonna be huge and they're basically doing the credit score we had a conversation yesterday with um some lads from a protocol called swap who's doing like a digital identity sort of uh kind of probably similar thing to the lit entry protocol and basically now

that we're talking about credits where i'm starting to think like you can have like all of your nfts all of your social media accounts all of your crypto assets your ethereum wallets all the a dowsy or part of your all your poeps you can even now have a credit score all in kind of like this digital black box that is you know that's you effectively um you know you can have the land that you own in that metaverse you know all these things together to basically create your own digital persona that you know that that you own uh tied in with your ens and all that stuff um yeah i mean it's gonna be really interesting when we get to the point where uh we are judging people's uh reputation based on their on-chain activity like i wonder if if uh um going on paraswap with a vpn and

trying to get the airdrop even though us users weren't allowed to do it is gonna you know negatively affect somebody's on-chain reputation or you know doing things like that like i wonder if you if we have to start to think about what actions we're taking on chain um you know and you know what if you run somebody with your address right there's obviously so many ways around it and such but it's an interesting concept when it comes to reputation and credit on chain um and of course insurance is all tied in there as well based on you know who you can pick to ensure on that kind of scale um you start to play almost like a different game where um instead of just ensuring protocols then you could start to um you know

help individuals almost um based on their credit score or their reputation and such um it's just an interesting kind of vision um that i've started to develop yeah i mean as more and more assets start to be digitalized and uh ownership and and the value of these gets increased and then you get you know collateralized loans um and any sort of like transfer even even just ensuring that you know against like uh bridge crosstrain bridge insurance you know it's another project it's another one of the um types of insurance to bring out because there are risks with all of these things and as people move into the space more and more that you know and even then as the space just evolves who knows what's

going to be coming out the next couple of years um you know 15 years ago if someone described the d5 space you know anyone they think they think they're mad so who knows where we're going to be in a few years who knows what you know but there'll be enough value in it but there will be insurable aspect assets and insurable events that uh will you know require us to be there it's super exciting no matter which way you look at it whether it's whether that's you know buying yeah uh virtual pet insurance for your you know your your virtual dog in the metaverse i don't know it could be anything yeah and and uh you know they're ultimately i think it creates uh a more i don't know i'm not i'm not really sure

quite what the word is but but when uh andy andy mentioned kind of like starting to judge people with their digital personas you know people are uh already they have their browsing history and if that's exposed you certainly become judged for it i mean if you saw the sec report on like how what what some of these sec uh employees are actually doing with their time and uh the amount of uh time they're spending on porn sites other than uh finding effective regulation you know that was quite surprising and i think that's a as an effective judgment on you know this is a public employee working for the government and they're they're you know using their time in a much mismanaged way um not to say that other

people should be uh you know controlling what what individuals do with their time but it does kind of shed light and expose uh some of the more uh just uh you know i guess unsavory types of activities that people are spending online and and uh especially when when that time is somewhat public because it's a public entity that they're working for it does start to shed a lot more light on kind of what people are doing online for sure absolutely and it's different on um you know back to kind of some of the insurance talk with regards to um

you know the metaverse almost and you know you mentioned some of the nft stuff um i'm curious what what you think like in the in the nft world um you know to protect some to protect against something like that like a noob selling their board ape you know 500 east below floor place or something you know what are kind of your thoughts as far as protections in the nft world um when it comes to i guess like yeah just like arbitrage and um just making simple ui errors sure yeah so there's i mean there's a few different options here so i mean obviously the board sale last week i think it's akin to private key loss right it's extremely hard to prove that it was you know um a genuine accident

you know if you lost your private keys and suddenly your your funds uh were whittled away to you know your mate dave whether or not it's public or not you you know it's hard to prove that that was a malicious attack or whether or not you just basically gave your keys to someone on a piece of paper or a restaurant and said all take my money i'm insured i'll get it back yeah and so andy and i actually lost all all our keys in a boating accident um unfortunately uh no that's that's quite a meme um it goes back a while you know like okay go ahead that's that's rough i'm sorry for that that's horrible um yeah so that's that's one example i mean if you can

prove if there's a way of proving that the same as proving that you know you undersold an nft um the problem with nft insurance obviously you know how do you value them how do you get genuine value because you know the way that i mean my favorite sort of anecdote about nfts right now is that say you've got i don't know a million dollars in ethereum you create your own nft you can select yourself from for a million dollars in ethereum so now you've got a million dollars in ethereum and you've got an nft that's just been valued at a million dollars now say you sold that 90 discount for you know let's say a hundred thousand dollars in ethereum you then sell it now you've got you know someone else thinks they're gonna buy a 90 discount they're thinking they get a great deal

but at the end of the day all you've done is generate yourself an extra hundred thousand dollars in ethereum now how do you as an insurer value that as you know um which which is the right value is it the the true value which is next to nothing is it the one million that was originally sold out it was a hundred thousand it was then sold genuinely on mobile market too so valuing nfts at the moment is extremely difficult um which is one of the biggest hold-ups in in you know having nft's uh insurance there i guess it's the same as traditional art insurance but there are you know we are making headways in it we will be the first you know people to actually offer nft insurance in the market yeah there's definitely a job available for an nft expert although they might just be way too loaded to

even care to to work anymore but the the uh appraisal of certain nfts is is going to be huge i think there's a project called abacus now um if if you haven't heard of them then you should totally check them out um they are doing nft appraisals um and they were looking they were hiring and whatnot and um they're basically trying to just provide a platform for people to actually assess what their nft is worth based on you know several metrics from rarity to previous sale to floor price to um you know look so they have i think they have like a pretty good computer generated algorithm and then i think they have like a human last call checker or something something uh to that extent so

um yeah it's tough to price these things um because to one person they might it might mean the world and it's another person who might just be a jpeg um you know so so it's definitely an interesting interesting dilemma but i i've been finding that nfts have been like the most uncorrelated market to anything in the world right now um like with even to even how everything goes along with the stock market the housing market the bonds the the bitcoin market then you've got the ethan all coins in the d5 like nfts just kind of have a mind of their own and they're just kind of i mean they just kind of operate on their own uh can win due to like the illiquidity and kind of like the art nature of it um you know i'm i'm curious what what you think about uh the nfc market going forward in

terms of um basically making it more liquid or perhaps making it more um you know efficient and accessible in terms of gas fees or um you know in terms of like all these new projects being pumped just a brief overview of kind of some of the things that you've thought about the nft world yeah nfc's uh i mean they're incredible right they have their space it's the technology is akin to you know some of the fundamentals of d5 and blockchain tech um at the moment i think they're in the same sort of cycle as like the 2017 ico craze so obviously it's a lot of hype i i i wouldn't invest in too many nfts

myself uh akin to me going down the local collectible store or like you know antique store and trying to find something rare because i know very little about motion that said i got very lucky i do own a punk so i'm extremely happy with my my original crypto punk which has done me very very well for now um i'll be holding it through the crash if there is a crash you know from right about this inflated market um but i do think it's in a bit of a bubble um i think people should be careful like i said before there are ways of generating value with these things that um completely artificially pumped up for no reason just to give someone someone extra cash themselves sorry but

at the same time they you know entities are the future digital provable ownership is um is something that you know is something that's been missing from um from the world and will continue to increase in value in the long term you know it's like my my favorite example of explaining nfts to people is you know how if you go to the louvre and you see the mona lisa how did you know that's the real mona lisa how did you know that's not just a very good copy that even the louvre bridge puts out maybe they've got the real one behind but you know i'm i'm not a good enough expert they don't let you close enough they don't let you touch it inspect it do anything else you could be looking at it looking at a very good fake i mean the real one might have been

stolen a few years ago we'd never know it could be just another example there and then adding on the other sort of trend you know the provable ownership really does add the value to it yeah agreed um punks are like the mona lisa's of the nfts and uh board apes like the or like the uh the jersey shore um it's quite a it's quite a funny difference in the community um i'm sure the punks will eventually re-flip the apes it's only a matter of time um and nfts are the whole actually i think you're going to evolve quite a bit like nfts uh in a few years are

going to look very different from the the profile picture art pieces that we're seeing now and you know we're already touching on on the identity tokens and likely they you know will be some form of an nft um even though it may not be the visual uh type of art piece that that we're accustomed to seeing as of recently yeah yeah there's a lot of i mean yeah i mean you said like uh was it eminem bought one over the weekend right so he bought a 600 460 k board 8 newton 8 and [Music] you know that that's i mean having like a digital identity for yourself if he's going to use his

board 8 for that you know for the next 15 20 years or however much you know in the in the metaverse how if that's going to his identity going forward then great um but at the same time my argument for celebrities is that they could literally just create any random basic avatar of themselves and say this is my nft this is uh you know this is me and ironically that would probably then sell for the 400k afterwards because they could probably turn around and say oh this is my nft you know this this was the original original m mt you don't need to go and buy a board 8 to do that as a celebrity but they're doing it they've got they've got the money why not yeah one of my uh i'm bullish on to nft's uh mario gatsey

a really good football player just bought a small brand i was pretty gassy about that that's probably the coolest part is like being in the same community as like some really famous people and seeing them coming to crypto it's it's funny that nfts have done that today there's a there's a naz music drop nft a few hours i think those are going to be huge if you haven't looked into royal uh check out royal it's a really good music nft platform yeah yeah yeah so i mean those kind of ones i mean those but those are the ones that are you know novel for now but i'll you know a lot of those going to have any real-world value in six months a year you know when something else comes along that's that's the real hard thing to sort of stay on

top of i mean yeah i mean there's a crypto event coming up where they're like oh you you buy a ticket and you get an entertainment i'm like who's who's going to value an event they didn't go to yeah as an nft ticket there's some real people just throwing word nft around just for the sake of it which does give a few top signals in terms of a bit of a bubble and i think a lot of people are going to come into the space thinking you know reading all these big stories about people who have turned you know a jpeg into a few million dollars but uh yeah do i you know there is there is real you know good value and good technology behind it that uh in the longer term really will benefit the entire space as we move sort of more

digital um and more more into the sort of you know more the rabbit hole of crypto yeah i didn't really finish explaining um but i'll let my cognitive dissonance do the explanation which is i'm already locked in i'm minting some i'm gonna defend my uh my mint in that these these new music nfcs are called limited digital assets they're called ldas and so effectively what you get is you get a percentage of the royalties from like the streaming royalties from spotify soundcloud apple music every nft holder like the more you pay for this drop the more of the royalty you get so these while they are a part of the i agree of like the hype and in essence

they're actually they could be argued as their yield generating from actual real world value rather than like just an nft project launching in erc20 so i'm excited for these um and you know potential for good upside but also like i don't know what is what is point zero five percent or point one percent of their royalty on one song probably not gonna be huge right but it's at least something to justify like cash flowing nft no it's great i mean it's just it's decentralized essentially ownership i mean in terms of like a same again sort of like a publishing house instead of uh you know all the different shareholders in a particular company that might put a record out you know if it's

nft style ownership all these ldas is that's a really nice way of uh a really nice way of spreading the um the benefit out amongst essentially investors right yeah it's cool it's new for sure so we'll see how it goes um yeah i'm curious man so it'll be it'll be interesting but wrapping things up here um first of all thanks for coming on dan it's an absolute pleasure um i know you had an epic trip to an epic trip to uh antarctica so that was pretty badass i'm sure you're still recovering a bit but um anything that our community can do to get involved uh with insurance recommendations how do they get involved how do they use insurance how do they get covered um before we kind of close it up

yeah sure no thanks i mean and yeah slightly recovering still um so yeah i mean we're here to keep everyone safe right so it's all about getting helping people invest safely helping people make make those returns without the downsides so we educate people as much as possible you can find our website ensure ace dot io find us on twitter telegram our team are always getting involved uh discord as well so you can ask questions um you know find out which type of insurance would be ideal for you find out what the risks are within my security ratings on each of the protocols we list which you know should highlight some of the higher quality protocols out there in our view anyway with some of the you

know the big uh d5 2.0 protocols um you know including mike olympus uh abracadabra so you can get some of those we've got wonderland wonderland on there so you know the ones that really have a few you know thousand percent apys you can be getting for you know let's say two to two to three percent cost of uh insurance you're really you know covering yourself from quite a lot of issues that could could or may manifest um this year yeah it's going to be a really exciting year for us uh obviously you know d5 is just the you know has a potential just absolute moon right now a huge amount of money coming into it still and you know coming as an insurance protocol is is it's great we're just helping to protect those big

assets bigger institutions as they invest their assets into the space which at the end of the day is it should be everyone's goal i mean that's what we need we need the big big money coming in it justifies what we are we all do very well out the back of that um and it just helps the space to go to that next level um and you know get you know why more and more widely adopted which as early adopters as we all are really does you know benefit us all in a big big way so that's why so many people working on different safety measures to make the same make the space safe as possible and that's why we're here we're here to you know make people's um d5 journey that much safer

yeah big brother superman thanks for coming on it's been a blast and yeah like you know like we talked about it it's really a team effort out here um building a safer community and a safer uh investment environment in d5 and ultimately bridging that that gap to uh some real world uh value accrual through um whether it's streaming in music and nfts or it's artistic value um you know built building a uh a transparent and open community that's also safe um and and insurance ensure ace is you know right on the forefront of that um sweet man thanks for coming on