(Image source: FairSide Network.)
FairSide Network, a startup characterizing itself as a next-generation cover primitive working to offer crypto holders a better alternative to DeFi insurance protocols, has raised $4.2 million in an early staking round to the protocol’s capital pool with participation from Alameda Research, Dominance Ventures, Jump Capital, Figment Capital, and Daedalus Angel Syndicate.
FairSide aims to provide members with blanket coverage through an approach of single membership that covers more than one blockchain, project and type of loss. The company says that coverage is thus more inclusive and designed to follow the user, presenting many advantages to crypto holders as they maneuver not just DeFi, but all of the cryptoverse. Through its new offering, FairSide says crypto holders will no longer need to manage multiple policies, pay numerous premiums, or wait for pools to be created in order to get coverage; rather, members will be afforded cover automatically without the need to buy a specific project policy.
Brian TK Lee, Alameda Research.
“Insurance in the space is underdeveloped and viable solutions are needed. FairSide’s single membership, cross-chain, multi-cover approach is like nothing we have seen. It has the makings of something big and we are excited to be a part of it,” comments Brian TK Lee, Alameda Research.
A FairSide statement on the capital raise asserts that existing crypto-insurance offerings’ over-reliance on scarce liquidity pools and the sky-high premiums they carry, sometimes as high as 40 percent or more, make them too costly and insecure to provide sufficient protection in the event of a smart contract failure, exchange hack, exploit, or any other unforeseen external event.
“The vast majority of today’s crypto investors interact with multiple DeFi protocols, oftentimes without any form of insurance coverage,” comments James Parillo, Figment Capital. “Existing insurance protocols are broken and Fairside aims to solve many of the biggest problems with existing offerings. “
FairSide’s solution as a cost sharing DAO [decentralized autonomous organization] socializes losses using the fundamental principles of traditional insurance. Utilizing core risk management principles, FairSide says it has lowered the risk of staking, created comprehensive cover offerings, introduced a low single fee, and increased contributor rewards. “In essence, FairSide takes the best elements from the centuries-old traditional insurance industry and decentralizes them,” the company statement says.
Ivailo Jordanov, Daedalus Angel Syndicate.
Redesigning the Way Coverage is Conceptualized
“We’re extremely excited to support FairSide, who we feel re-designs the way cover is thought about in the space,” comments Alexander Opeagbe, Founding Partner, Dominance Ventures. “FairSide aims to offer users engaging in DeFi protocols the same benefit they would gain from car insurance in the traditional world, except rather than bury users in legal jargon and paperwork, it’s through a decentralized cost sharing network where the parameters of claims are governed through a DAO.”
“We are delighted to back Brandon and the FairSide team on this journey,” Ivailo Jordanov of Daedalus Angel Syndicate says. “It is exciting to see a veteran from the traditional insurance industry take their learnings and build an innovative solution using the efficiencies and transparency provided by the blockchain.”
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