Major crypto investment firm Pantera Capital unveils that it is expanding its decentralized finance (DeFi) portfolio.
The firm is backing Risk Harbor, a risk management marketplace for DeFi that was founded this year. It utilizes an automated, transparent and impartial claims process to protect liquidity providers and stakers against smart contract hacks and attacks.
In a new article, Pantera’s Tina Chen discusses DeFi’s explosive growth and what that means for the role of insurance in the nascent crypto sector.
“Roughly $50 billion worth of assets are locked up in decentralized finance (DeFi), a fourfold increase since the start of this year. These deposits are mostly uninsured…
The good news is DeFi projects are experiencing explosive growth, and that growth shows no signs of slowing down. Bad news? This rise in hacks is likely to accelerate as DeFi continues to grow, further exposing liquidity providers and stakers to acute risks of loss.”
In 2020, $129 million worth of crypto assets were lost to DeFi hacks and attacks, according to CipherTrace.com. In the first five months of this year, the blockchain analytics firm highlights that DeFi hacks have already surpassed last year’s figures, amounting to $156 million in stolen funds.
“The hacks in the last year have made clear that, as the DeFi ecosystem grows and becomes more complex, malicious attacks are unfortunately inevitable. This creates a widespread need for risk management products that protect against hacks and attacks and mitigate the risks and losses they bring about.
We believe strong risk management solutions will be critical for mainstream DeFi adoption, helping retail investors and institutions to feel safer putting their capital to work.”
On Thursday, Risk Harbor announced their mainnet launch, which was funded by a $3.25 million seed round co-led by Pantera and venture capital fund Framework Ventures alongside asset management firm Bain Capital Ventures, crypto venture capital giant Digital Currency Group, investment firm Coinbase Ventures, and blockchain venture capital Nima Capital.