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Andreessen Horowitz-backed Anchorage announces insurance coverage for crypto-assets

Akash Anand



Cryptocurrency custody gets a boost as Andreessen Horowitiz backed Anchorage gets set to provide 'end to end' coverage
Source: Pixabay

With the increasing adoption of cryptocurrency assets in the financial ecosystem, many more institutions have launched products to facilitate their growth. The latest company to do so is the Andreessen Horowitz-backed Anchorage, which announced that it is ready to offer a fully-insured solution for storing digital assets for investors and institutions.

Anchorage, in an official blog post, stated,

“Here’s the problem with crypto custody insurance: not all coverage is equal. Most custodians’ architecture uses a combination of hot wallets and cold storage, and policies may vary from one part of the architecture to another. This approach can result in coverage gaps.”

Anchorage will directly compete with other cryptocurrency custody organizations like BitGo, which shot to fame for taking the institutional custody leap first. Anchorage has assured users that it has better features than its competitors, because of the freedom with which it considers custody solutions. Other custody organizations provide insurance in the face of “Acts of God” like natural disasters, while some only insure assets that are held in the cold storage part of the custody.

Anchorage added,

“With Anchorage, investors don’t face such a trade-off. Our solution is built on new technology that advances beyond cold storage to enable online participation with offline assets. As a result, we were able to work with insurers to develop an insurance policy that breaks new ground for our industry, covering digital assets under custody end-to-end throughout their entire life cycle.”

The topic of custody in the cryptocurrency market has been much debated about, with its pros and cons being weighed heavily by the community. There has been positive news for the custody aspect on one side, with ICE’s Bakkt acquiring the Digital Asset Custody Company to provide a purpose-built custodian that safeguards cryptocurrencies in order to provide better security to its customers.

On the other side, some people in the space still consider the custody industry as slightly shaky, with the risk of losing funds being a factor to be wary of. This sentiment was reflected when Sam McIngale, Head of Product for Coinbase Custody, stated that “organizations were putting its own funds at risk and not the customers.”

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Ampleforth could help create next-gen synthetic commodities for portfolio diversification, claims Blockfyre report




Ampleforth could help create next gen synthetic commodities for diversification of portfolios claims new Blockfyre report
Source: Unsplash

Ampleforth was the first token to successfully complete an IEO on Bitfinex. This IEO caught the attention of a lot of users in the cryptospace, as the $5 million hard cap was sold out within the first 11 seconds. A new report by Blockfyre details how Ampleforth could pave the way for a new asset class for portfolio diversification in the future.

The report also highlighted a feature of Ampleforth that allows a flexible supply that adjusts to the market demand, while price simultaneously finds equilibrium. The token also aims to tackle the strong correlation that most cryptocurrencies share with Bitcoin.

Synthetic Commodity

Ampleforth project has the ability to create synthetic commodities that are disconnected when it comes to price fluctuations due to correlations, which is a common problem faced by both cryptocurrencies and traditional asset classes. Although Bitcoin was created to tackle problems that fiat currency inherently has, it still has some correlation issues.

In a world where traditional assets are widely affected by macroeconomic and global political scenarios, Ampleforth aims to create a new asset class, Synthetic Commodity, to tackle this problem.

The report stated,

“BTC as a synthetic commodity doesn’t show correlation to traditional markets such as stock stocks and bonds. Thus it reflects a potential good investment for portfolio diversification, in order to tackle macro-economic recession”

Although BTC is an uncorrelated asset, other cryptocurrencies are widely correlated to it. Ampleforth’s protocol introduces synthetic assets that “will always find a price-supply equilibrium by adjusting the price due to demand.” The report added,

“It needs to be emphasized, that these price-supply information will always be distributed amongst all token holders, so the supply of all token holders will decrease / increase. As a result, the overall cut of the total supply for each person will always remains the same.”

The report further said that if successful, Ampleforth will directly compete with Bitcoin’s $145 billion market cap and also against traditional asset market-based in fiat.

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