DeFi insurance is an important part of DeFi's development, and it's what makes DeFi resilient. Nexus Mutual provides smart contract insurance for DeFi protocols, and YFI is planning to enter the game as well. Since DeFi insurance protocols are smart contracts, the DeFi space is in need of more insurance service providers to protect DeFi's growth.
Just as DeFi is gaining popularity today, the industry is in the midst of change. Supporters see DeFi as the cornerstone of the future finance and the gateway to the future financial world.
Critics argue that DeFi open finance has yet to be proven and that there is a huge gap between DeFi and traditional centralized finance.
Despite the mixed reactions, it is undeniable that the entire DeFi ecosystem is gaining momentum and participants are striving for the prospects of DeFi.
DeFi, Rising Nova in Blockchain Space
From Traditional Finance to today's Decentralized Finance (DeFi), the financial services have undergone a wave of technology innovation, which has given birth to what is widely known as DeFi - Decentralized Finance, or Open Finance today.
It is known that traditional financial institutions are generally divided into banks, security companies, insurance companies, trust companies, investment funds, asset management companies, etc. A complete financial service closed loop is formed between various financial institutions through information exchanges and asset transactions.
Compared with traditional finance and fintech, DeFi is characterized by open-source software and transparent rules. There's no need for centralized institutions to enter, which achieves lower operating costs and higher efficiency in resource allocation and wider financial inclusion. To the financial function itself, open finance will also be more conducive to the realization of the core financial functions such as facilitating payment, aggregation and allocation of resources and risk diversification.
MDS, Explorer of DeFi Insurance
As a newcomer in the DeFi field, MDS (Mutual DAO System) is a new face. However, it is easy to find out that MDS has been laying out its business around "Blockchain + Mutual Insurance" for a long time.
On the one hand, the upgrade from application to platform has been completed. At the early stage, MDS is still a decentralized insurance in its infancy, and it is relatively simple in terms of mutual product release and user groups. After upgrading to the Mutual DAO System, MDS will provide services to the users as the underlying platform, and any person, any organization (community) can initiate relevant subdivided mutual aid plans on the MDS platform.
Under the DAO self-organizing smart contract, it truly makes it real that the organization belongs to the network, and everyone has his or her saying, and has corresponding influence on the development of the organization. That is to say, on the Mutual DAO System platform, everyone can freely initiate mutual aid plans and set the initial parameters and the scope of mutual aid, but also enjoy the rights and benefits of participating in the system governance of mutual aid plans, fulfilling mutual aid obligations and getting pass dividends.
Based on the Blockchain technology, MDS's distributed LEDGER improves transparency of transactions, and improves flexibility, standardization and relative isolation of risk through code. This improves the transparency of transactions, enhances the traceability of transactions, so that it conducts supervision of the members on the self-governing mutual aid schemes in which they participate.
The vision of opening up the Mutual DAO System (MDS) to global users and using the blockchain to complete the payout and settlement of related mutual plans on the platform is expected to drive the MDS to become the black horse in the DeFi space.
