Relm & Chainproof To Provide Discounted Slashing Insurance for DVs
ETH staking insurance is about to get a lot cheaper, thanks to Distributed Validators and upcoming insurance products from Relm and Chainproof.
Historically, insuring against Ethereum staking risks was prohibitively expensive for node operators, staking protocols, and ETH holders alike. For example, there was a time when Lido spent 25% of their revenue on insurance - eventually they let their policy lapse and opted to use their own treasury for self-coverage instead. Thus, even Lido - with its curated set of arguably the best professional node operators in the world - couldn’t get insurance at a palatable price, which speaks volumes about the risks inherent to ETH staking.
However, with the introduction of Distributed Validators to the staking industry, slashing and downtime risks are greatly reduced, and insurance providers are catching on. Today, we are proud to announce that Obol Labs is collaborating with Relm and Chainproof to offer slashing insurance for Obol DVs, at discounted premiums compared to insurance for non-distributed validator setups. Both providers have formally expressed their commitment to exploring and introducing slashing insurance products that leverage the security of the Obol Network.
With their expertise in risk management and the support of our team, Relm and Chainproof aim to offer DVs access to insurance coverage that is more affordable than ever before. The exact cost of insurance policies will depend on the exact setup of the DV cluster(s), the cluster participants, and other security practices. Chainproof’s insurance would cover slashing events, downtime losses, and for the first time ever, private key compromise. Coverage will depend on the outcome of Chainproof’s mandatory infrastructure audit for the cluster setup.
"We at Chainproof are excited to offer insurance to Obol customers so early in the lifecycle of Obol's innovative Distributed Validator Technology. Due to the deep technical due diligence performed by our security partner Quantstamp, we are able to confidently offer this insurance. Together with Obol, we're dedicated to making the staking landscape safer for all participants." - Sebastian Banescu, Chainproof Co-founder
Relm, which enabled Blockdaemon to offer an industry-first staking slashing insurance in 2022, also recently announced an expanded suite of insurance products on April 3rd, with five upgraded Web3 offerings. The latest solutions provide market-leading slashing insurance, which covers losses associated with missed rewards, attestation penalties, and the loss of private keys.
“Relm has always supported innovative businesses and products in new and exciting industries. We're thrilled to see Obol's new DVT solution positively impact a Staking as a Service company's risk profile. Relm policyholders employing best-in-practice management techniques and technology can take advantage of potentially lower premiums and increase their resilience." - Joseph Ziolkowski, Relm Founder and CEO
Collin Myers, Co-founder and CEO of Obol Labs, highlighted the transformative potential of DVT, envisioning a more secure and institutionalised staking landscape.
“We are excited to see the network effects of DVT across the validator industry. Creating insurance products through DVT will incentivize the next chapter of staking to run on more secure, highly available infrastructure. The work done by Relm and Chainproof will lay the foundation for institutional staking products.” - Collin Myers, Obol co-founder and CEO
The interest from insurance providers even at this early stage serves as a testament to our DV middleware client; Charon, which we built with security, resiliency, and composability in mind. DVs are run across multiple nodes, with greatly reduced downtime risks due to the “greater than two thirds” threshold needed to stay online, and greatly reduced slashing risks due to the handling of partial private key shares instead of entire private keys. Additionally, each DV cluster can contain nodes with unique geographic locations and client combinations, further reducing single-point-of-failure risks.
Welcoming Relm and Chainproof to the Obol ecosystem marks a significant milestone in our mission to foster a more secure and sustainable decentralized Ethereum. Together with industry leaders, we are pushing the boundaries of innovation and empowering node operators and stakers with the tools and resources they need to thrive in this rapidly evolving industry.
Access to comprehensive and low-cost insurance is a key requirement for Ethereum staking to become accessible to institutional investors, traditional finance, and ETPs. We couldn't be more excited about the possibilities that lie ahead. Stay tuned for more updates as we work to bring these groundbreaking insurance products to fruition.
About Obol Labs
Obol’s mission is to build shared web3 technologies for Ethereum infrastructure operators, to establish a credibly neutral and trust-minimised infrastructure layer. Obol’s Distributed Validator middleware client, Charon, boosts the security, resilience, and decentralisation of the Ethereum validator network by enabling “squad staking”. Learn more at www.obol.tech
About Relm
Relm Insurance Ltd. (Relm) is a Bermuda-domiciled specialty insurance carrier supporting emerging industries that spur innovation and next generation technologies. Launched in 2019 to address the scarcity of insurance capacity available to these nascent markets, Relm plays an active role in bolstering the resilience of these innovative industries. Relm’s unrivaled industry expertise and solutions-driven track record makes it a highly sought-after risk partner for businesses and institutions operating at the forefront of Web3, digital assets, AI, and alternative medicine. Relm has earned a Financial Stability Rating of A, Exceptional, from Demotech. Please visit www.relminsurance.com for more information.
About Chainproof
Chainproof is the world’s leading regulated primary insurance carrier covering non-custodial smart contract, slashing, and other crypto risks. Incubated by Quantstamp, backed by Sompo, and reinsured by Munich Re, Chainproof provides smart contract policies for DeFi, slashing policies for proof-of-stake node operators and liquid staking providers, and more. Head to Chainproof.co or follow them on Twitter/X @ChainproofDAI and LinkedIn to learn more.