The advent of decentralized finance has proven somewhat successful. Hundreds of projects and protocols compete for traction in a rapidly expanding industry. With billions of dollars locked into DeFi, one can safely assume there is an interest in these opportunities.
Users have increasingly become aware of risks in decentralized finance. Rug pulls, flash loan hacks, smart contract exploits, and other issues remain prevalent with little or no recourse for affected users. So, people have grown more inclined to take out DeFi insurance policies to protect the value of their crypto assets.
However, most DeFi insurers don’t have an effective way to manage claims disputes on-chain. If a user makes a false or fraudulent claim, insurers often struggle to assess its validity.
Users who have taken out a DeFi insurance to protect the value of their assets could make a claim on the policy if they think a transaction was compromised. But without an effective built-in claim verification, the DeFi insurance protocols often have a hard time ensuring whether a claim is valid.
In these situations, the insurance protocols have to either pay out without validating the claim or take the dispute off chain, which could turn into a prolonged and messy battle. If the claimant feels their DeFi insurer has treated them unfairly, they have the power of social media to hurt the insurer’s reputation.
There should be no room for disputes
Nobody – neither claimants or DeFi insurance protocols – want mud-slinging or messy disputes. Unless you have dealt with a situation like this or you have the foresight to avoid them in the first place, you won’t appreciate the importance of the claim verification tools like Astra protocol.
Astra equips DeFi insurance protocols with the world’s only patented claim verification tool to quickly ensure whether an insurance claim is valid. It plugs into any existing platform or protocol with ease, providing legal assurance to the DeFi insurance policies.
Astra’s legal layer and dispute resolution mechanism ensure illicit activity is eliminated from the equation, giving peace of mind to both the users and insurance protocols.
When a user makes a claim on their insurance policy, Astra jumps into action to verify its legitimacy. If it finds the claim to be valid, the insurer must pay out.
If the claim turns out to be invalid, Astra makes recommendations to the insurer as to how they should proceed. Astra prioritizes fairness rather than benefiting a specific group.
As the DeFi industry keeps growing and expanding daily, efficiency will be the keyword to success for any legal provider in the industry.
Existing and future DeFi projects would do good to pay attention to dispute resolution. It is a frictionless way of providing peace of mind to all users and onlookers.
Without countermeasures in place to rectify mishaps, DeFi will always remain the riskiest segment of cryptocurrency. That hinders the growth and adoption of decentralized finance solutions globally. With the proper infrastructure for protection and legal matters, it can enter the next stage of development and gain better global traction.