Mumbai, 19 Aug (HS): InfinityDAO,

an AI-based decentralized finance ecosystem, is preparing a proposed insurance

protection of up to US $1 billion for its IDL token and the entire ecosystem.

If the proposed programme is approved and implemented, it could be an important

step towards risk management and institutional trust in the digital asset

sector.

An InfinityDAO

spokesperson said Wednesday that the final policy, underwriting terms, coverage

limits and exclusions of the proposed insurance program have not yet been

determined. The arrangement is being worked out through a specialist crypto

insurance syndicate based in the UK. The proposed insurance system is planned

to cover five key areas. These include protection against default risk

associated with Dexter tokens in the circumstances set out in the policy,

platform default protection, coverage in the event of a scheduled failure or

insured default on the platform or its ecosystem, protection against loss from

theft of digital assets, cybercrime, unauthorized transfers, and other related

events covered by the policy, directors' and officers' protection, and

protection against management claims covered by the policy for eligible

directors and officers. This may also include situations involving certain

financial crises or insolvencies, and ecosystem and stakeholder protection:

additional protections within the scope set out for eligible users,

stakeholders, and interests associated with the platform's ownership and

management framework.

Investors and users

in the crypto industry face technology, custody, cybersecurity, and operational

risks. In this case, specialist digital asset insurance can become a means of

transferring some of the risk to the professional insurance market. However,

insurance does not guarantee the price, return on investment, liquidity, or

redemption value of a token. Coverage is limited to only those risks and

circumstances that are explicitly covered in the final policy.

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Hindusthan Samachar / Ajay Vasant Mardikar