Digital-asset insurance broker Native has successfully arranged $25 million of blockchain-based cover against hacks for Team Rizzo, a company specializing in machine-learning businesses and staking validator services on Bittensor, a popular cryptocurrency-driven AI network.
Native, based in London, acted as a broker and underwriter using its own syndicate and capital pool on Nexus Mutual, a decentralized insurance alternative that partnered with Native last October. The insurance cover provides protection against smart-contract hacks that could result in the loss of Bittensor tokens (TAO) used for validating the network’s proof of stake (PoS) consensus mechanism.
Hacks are a major concern in the crypto industry, where insurance options are limited, especially in areas like staking and decentralized finance (DeFi). Recently, Bybit, a major cryptocurrency exchange, fell victim to hackers linked to North Korea, resulting in a loss of $1.5 billion.
In 2019, Nexus Mutual introduced an alternative form of insurance for the growing DeFi sector, encouraging members to invest in blockchain-based syndicates, similar to how investors support risks in the Lloyd’s of London insurance market.
Native, with one of the largest capital pools on Nexus Mutual, also serves as a traditional broker, offering access to Lloyd’s for specific types of crypto-related insurance. The speed at which Native secured the cover for the Rizzo validator risk on Bittensor, in just four weeks, is remarkable, according to Native’s co-founder Dan Ross.
“This is the first time Bittensor has been underwritten,” Ross stated. “Team Rizzo wanted their own policy to attract stakers to their validator and provide a sense of security. We were able to create a new product, underwrite a new protocol, and secure third-party smart-contract cover with a $25 million limit in just four weeks. This process would typically take three to six months with traditional insurance, if it could be done at all.”
Following the Bittensor policy, Native plans to provide cover for the bitcoin staking platform Babylon in the near future, Ross confirmed.
“Team Rizzo has strategically positioned themselves as one of the most reliable and high-performing validators on Bittensor,” stated Bittensor founder Jake Steeves.