Please describe your proposed solution
Problem
Cardano asset holders are completely on their own if they suffer a theft. Law enforcement agencies worldwide lack the expertise and resources to respond effectively to cryptocurrency theft, leading to an extremely slow or inadequate action. While specialised crypto investigators can trace stolen assets, their services are prohibitively expensive, and engaging crypto lawyers to freeze stolen funds on centralised exchanges (CEXs) can cost tens if not hundreds of thousands of dollars. As a result, these costly and specialised services are inaccessible to most users, leaving the average Cardano asset holder unprotected and vulnerable in the aftermath of theft.
Solution
We offer affordable annual memberships that make the recovery of cryptoassets accessible to all holders, no matter the size of your portfolio. Our plans cover the cost of returning stolen cryptocurrencies, NFTs and tokens, and we’re insured by A-rated Lloyd’s of London syndicates to guarantee we can always provide our service to you, in any event. This is facilitated through paying crypto investigators and lawyers to work to reinstate your stolen cryptoassets to you.
For an annual memberships starting at £300 per year, users can connect up to 10 Cardano wallets (Ledger, Trezor and exchange accounts) to enable cover.
We are launching a new free tier in October 2024, that will allow holder to protect their EVM assets. The free tier offers complimentary crisis response services in an event you suffer a theft - a much needed service in the crypto space given global law enforcement is still not effective in resolving crypto thefts.
As a part of this grant, we will complete the Cardano implementation so Cardano assets can be protected into the paid tiers, alongside supporting Cardano in our free tier membership (allowing one Cardano address to be connected).
Below is an image of the cryptoassets we will be compatible with upon the successful grant application:
Reasons for Our Approach
We recognise that the insurance industry is eager to engage with cryptoassets, but only through a scalable and fraud-resistant solution. Our approach, which focuses on a membership backed by insurance (insuring the costs of discovering and recovering stolen crypto) addresses this need. By making a proven process (returning stolen crypto) accessible and affordable through insurance, we are creating a solution that benefits individual users and can be rolled out globally.
Who Will Our Project Engage
Our project will engage all Cardano asset holders by offering protection for their portfolios against various theft scenarios (e.g., wallet draining, SIM swaps, in-person thefts). We aim to serve a broad audience, ensuring that every Cardano asset holder can safeguard their investments through our affordable and effective memberships.
Demonstrating Impact
To demonstrate our impact, we will sync daily with the Cardano blockchain and display key metrics on a dedicated Cardano page on our website, including:
- Total number of Cardano wallets protected by CoverCrypto
- Total value of Cardano assets protected by CoverCrypto
These transparent metrics will showcase the growing security of the Cardano ecosystem as more users adopt our protection services.
What Makes Our Solution Unique
CoverCrypto is the world’s first solution specifically designed to protect individual cryptocurrency holders from theft, focusing on self-custody—a demographic identified as particularly vulnerable according to Chainalysis. Unlike other providers, we prioritise safeguarding individual consumers, filling a critical gap in the market.
Longer-Term Vision
Our grant solution will initially protect Cardano asset holders, but we aim to expand our offerings to include traditional insurance products (e.g., car, home) on the Cardano blockchain. This expansion will engage a wide range of stakeholders across the insurance industry—customers, brokers, and insurers—further embedding Cardano into an industry ripe for technological innovation.
About CoverCrypto
CoverCrypto offers an annual membership service that insures the cost of recovering stolen cryptocurrencies, NFTs, and tokens. Our service is insured by Lloyd’s of London syndicates. To learn more, please visit our website.
Longer term vision for the to Cardano ecosystem
In the long term, our project could catalyse broader insurance industry adoption of Cardano’s blockchain technology. Beyond CoverCrypto, Cardano’s tech could support various insurance use cases, including:
- Settlement of premiums: Streamlining interactions between insurers and reinsurers, removing intermediaries, and improving overall value to consumers.
- Immutable records: Enabling faster claim settlements while reducing administrative costs, as about 50% of premiums currently go toward such costs.
- Transparency and competition: Publicly accessible records could lead to better pricing and more competitive offerings, pushing costs lower for consumers.
- Ultimately, our goal is to contribute to the creation of a decentralised risk exchange, where insureds can share data and foster a competitive tendering process for insurance services.