NFT Insurance

NFT Insurance

Written by
Nancy R.
Date published
September 22, 2022

~$2.3 billion is permanently lost from ~377 recorded Web3 scams, hacks, and exploits in 2022 so far (@CertiK). It's essential that we insure our digital assets if they are to truly go mainstream.Today, I'll be diving into NFT insurance. Thread below 👇


1/ Out of an estimated 84 million total active wallets in Web3 (this number is hard to gauge), there have been over 950,000 unique wallet addresses that sold/purchased NFTs in Q2 2022 (data @chainalysis).

So, how is risk currently being mitigated when dealing with NFT assets?


2/ It appears that the first line of defense is the age-old adage, "Don't invest more than you can afford to lose," with many investors, both institutional and retail, adhering to it.But, what happens when an investor does lose?

3/ In many cases, it appears to be plainly accepted, at least by retail investors, that the value of the initial investment is gone forever.

4/ Demographics show that the Web3 space is mostly made up of men between the ages of 18-41 (data via @MvmtStrategy), i.e. individuals who typically have no dependents and are just beginning or in the prime of their professional careers.

5/ These "degens" (myself included) who invest in NFTs are referred to as such for a reason ➡️ most understand the high risk of investing.

6/ But, what about institutional investors and whales?

7/ This is where fine art and specie insurance comes in. Specie insurance is a form of coverage that "is essentially about protecting high-value, portable items – such as precious metals, gems, securities, cash and even cryptocurrency." (via @AXA_XL)

8/ For further understanding, check out this article by @HUBInsurance on how specie insurance could help insure your digital assets:

9/ Sadly, there's no public data available of the inner workings of the fine art and specie insurance industry; it's a very secretive space.

We'll have to see if a trickle-down effect will occur with the insurance polices and tech of whales to retail investors.

10/ In the meantime, the very beginnings of the NFT insurance ecosystem have been slowly kicking off in 2022.

11/ Below are a few Web3 & Web2 entities that have bravely started innovating:

12/ @IMAfinancial's Web3Labs is gunning for first-mover advantage and plans to start selling NFT insurance in @decentraland. It is unknown whether any policies, like "negotiating insurance cover for an NFT somebody is thinking of purchasing," have been sold through Web3Labs.


13/ @hartiofficial partnered with insurance group Mitsui Sumitomo to offer NFT insurance coverage only on NFTs shown in the HARTi app - premium costs will be covered by HARTi. Again, it is yet to be known whether any claims have been paid out via the program.


14/ More recently, @PixpelPlatform, in partnership w/ @ConcordiumNet, announced that they will be launching an NFT gaming insurance policy to "rid the P2E sector of scammers."

Pixpel has not yet launched; I'll be keeping an eye out to analyze their insurance policy development!


15/ The Future of NFT InsuranceThe value proposition that NFT insurance brings to the overall Web3 ecosystem is undeniable.

16/ All 3 products above were started in 2022 - it's clear that we're beginning to reach an inflection point on the necessity of NFT insurance in the Web3 workflow.

17/ In 2021, the U.S. insurance industry net premiums written totaled $1.4 trillion (data via @iiiorg), so it's only a matter of time before developers & innovators delve into the untapped potential of the NFT insurance market.

18/ NFT insurance development is crucial for mass adoption of NFTs since the average mainstream user is more risk averse than us degens.

19/ It's important to note that the traditional insurance industry doesn't tend to evolve swiftly and typically lags behind other industries in adopting the latest and greatest technologies.

20/ To summarize, the NFT insurance industry as a whole is shockingly underdeveloped & still in its infancy. NFT coverage is underinsured & limited amongst both Web2 and Web3 entities, but progress is slowly being made. Expect NFT insurance to blow up in the coming years.

21/ Join me in the coming weeks as I take a deep-dive into the broader Web3 insurance ecosystem and explore the possibilities and technologies of this largely unexplored space

22/ Will YOU 🫵 be the one to develop Web3's first comprehensive NFT insurance protocol?

Do you work in the traditional insurance industry and want to learn more about NFTs?Have I missed anything? I'm keen to find out, my DMs are open to chat all things NFTs and insurance!