Current Date:February 27, 2025

Bittensor App Gets Hack Risk Cover From Nexus Mutual-Backed Insurance Firm Native

Native Secures $25 Million Blockchain Insurance for Team Rizzo

Digital-asset insurance broker Native has successfully arranged a comprehensive insurance policy totaling $25 million to cover blockchain-related risks for Team Rizzo. This organization operates machine-learning businesses and provides staking validator services on Bittensor, a prominent cryptocurrency-driven AI network.

Based in London, Native not only acted as a broker for this deal but also served as an underwriter, utilizing its own syndicate and capital pool on Nexus Mutual. This decentralized insurance alternative has been a crucial partner for Native since October of last year. The policy specifically protects against smart-contract hacks that could lead to the loss of Bittensor tokens (TAO), which are essential for validating the network’s proof of stake (PoS) consensus mechanism.

The threat of hacks remains a significant concern within the cryptocurrency ecosystem, where insurance options are often limited, especially in experimental areas such as staking and decentralized finance (DeFi). A recent incident highlighted this vulnerability, as Bybit, one of the leading cryptocurrency exchanges, suffered a staggering loss of $1.5 billion due to an attack linked to North Korean hackers.

Nexus Mutual was established in 2019 to provide an innovative form of insurance for the burgeoning DeFi sector. It encourages a community of members to invest assets into blockchain-based syndicates, drawing parallels to the traditional Lloyd’s of London insurance market, which allows syndicates of investors to underwrite various risks. Native, which operates one of the largest capital pools on Nexus Mutual, also fulfills a traditional broker role by connecting clients with Lloyd’s for certain types of crypto-related insurance coverage.

What sets the Rizzo validator risk on Bittensor apart is the remarkable speed at which Native was able to arrange the insurance coverage. According to co-founder Dan Ross, the entire process took a mere four weeks. “This is the first time Bittensor has been underwritten,” Ross noted in an interview. “Team Rizzo wanted to secure their own policy to encourage users to stake with their validator and ensure their safety. We’ve managed to create a new product, underwrite a new protocol, and obtain third-party smart-contract coverage with a $25 million limit in just four weeks. Achieving this through traditional insurance would typically take three to six months, if it could be done at all.”

Following the Bittensor policy, Native plans to provide insurance coverage for the bitcoin staking platform Babylon in the upcoming weeks. “Team Rizzo has strategically positioned itself to become one of the most reliable and high-performing validators on Bittensor,” stated Jake Steeves, founder of Bittensor, in a recent announcement.

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