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ARTICLE · 17 MARCH 2022

Decentralized Insurance – A New Frontier

Mayer Brown
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If you are reading this Legal Update, chances are that you have already heard of Decentralized Finance (DeFi). Put simply, DeFi is a decentralized platform that enables peer-to-peer provision of...

United StatesInsurance
Joseph A. Castelluccio
Joseph A. Castelluccio
Yevgeniy Markov
Yevgeniy Markov
Elliott S. Schreffler
Elliott S. Schreffler
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If you are reading this Legal Update, chances are that you have already heard of Decentralized Finance (DeFi). Put simply, DeFi is a decentralized platform that enables peer-to-peer provision of various types of financial services without the need for a central intermediary (such as a bank). DeFi transactions are enabled by public blockchains, such as Ethereum, Solana, Terra and Avalanche.

The volume of transactions that take place in the DeFi space is massive and is continuing to grow exponentially, as measured by the overall value of cryptocurrency assets deposited in DeFi protocols (i.e., "total value locked" or "TVL"). Given the growth experienced by the DeFi market, it is not surprising that DeFi users have sought to take advantage of risk allocation devices similar to those used in other markets and industries. One such risk allocation device is insurance. Given the fact that DeFi is—by its nature—decentralized and its users are accustomed to decentralized

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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