Did you know you can now buy insurance to cover the custody risk of holding Ethereum smart contracts on centralized exchanges just like you would home or auto insurance? Defi insurance provider Nexus Mutual offers a decentralized alternative to insurance and is covering risk on $59 million in Ethereum smart contracts. In September, at the peak of defi mania, Nexus had over $246 million in outstanding insurance contracts, according to the Nexus Mutual Tracker. Over 90% of the contracts are for one year duration or less, and Nexus has collected over $3.5 million in premiums. The exchange with the most insurance requests was Uniswap at $10.89 million, with $79,629 in premiums paid. In 2014, Mt Gox, a bitcoin exchange based in Japan that handled over 70% of all bitcoin transactions worldwide, lost about 740,000 bitcoins — 6% of all bitcoin in existence at the time — valued at over $3 billion in October 2017 prices. An additional $27 million was missing from the company’s bank accounts. But exchanges carry more risk than just security breaches. In November, defi protocol Pickle Finance was hacked for $20 million, causing its token to lose nearly half its value. In May 2019, hackers stole $40 million from Binance, the largest cryptocurrency exchange in the world, in the form of over 7,000 Bitcoin and double authentication (2fa) codes and wallet keys that were sold on the black market for further exploit. But investors have a lot more to worry about than just hackers and security breaches. On Friday, November 27, almost $103 million in loans were liquidated on Compound after an oracle pricing mistake by Coinbase on the DAI stablecoin. The third largest COMP farmer was accidentally liquidated for $46 million, burning thousands of ether in fees. Nexus Mutual uses Ethereum so people can share risk together (in a pool) without the need for a centralized insurance company and only members can decide which claims are valid, according to their website. The CEO of the London-based company is Hugh Karp, a finance and insurance professional since 2011. You can read the Nexus Mutual white paper here.