Two upcoming ethereum startups have collaborated to bring about banking level security to the clients of the second-biggest blockchain, Ethereum.
Nexus Mutual, an insurance company and a wallet provider Argent intend to work together to offer a blend of smart contracts and insurance to guard clients’ assets from cybercriminals. The smart contract is intended to keep hackers from depleting a wallet by briefly putting transactions on hold when they exceed a certain spending limit.
The client has 24 hours to take action against the frozen account – much like a bank would react to card fraud or suspicious transactions on an account. However currently no such technology is available in crypto trading, just like in the case of cash, if you lose your money, there is no way of retrieving it.
“We are thinking about not just crypto users but also new users – and so the end goal is to repeat what they get from their bank,” said Argent’s prime supporter Itamar Lesuisse.
Be that as it may, in the event that the smart contract neglects to carry out its responsibility, Nexus and Argent are building a fund which would guarantee security to its users against any misfortunes. To take part, clients would need to stake Nexus’ NXM tokens, for which they would get rewards. This is what happens when policyholders of a shared insurance agency get profits on their capital.
Obviously claims are paid out of the staked tokens.
Hugh Karp, the founder of Nexus said, “In general, what we are trying to do is provide cover to the crypto community when it can’t access it via the normal means.”
Undoubtedly, this isn’t exactly a similar dimension of security as FDIC protection, which is upheld with full confidence and credit by the U.S. government. However, Nexus is utilizing conventional thoughts of client driven and network centered mutualism which has everything except the approval of the profit driven market of insurance today.
Do you think smart contracts can ensure protection against fraud in case of crypto trading? Let us know in the comment section below.