Digital-Asset Insurance for Team Rizzo

Digital-asset insurance broker Native has arranged $25 million in blockchain-based cover against hacks for Team Rizzo, an operator of machine-learning businesses and staking validator services on Bittensor, the popular cryptocurrency-driven AI network.

The London-based company acted as both a broker and underwriter, utilizing its own syndicate and capital pool on Nexus Mutual, a decentralized insurance alternative that backed Native in October of last year. This insurance covers smart-contract hacks that could lead to the loss of Bittensor tokens (TAO) used for validating the network’s proof of stake (PoS) consensus mechanism.

Hacks present a significant risk in the crypto ecosystem, with insurance coverage remaining scarce, especially in more experimental areas like staking and decentralized finance (DeFi). Recently, Bybit, a major cryptocurrency exchange, lost $1.5 billion to hackers linked to North Korea.

Nexus Mutual was established in 2019 to provide alternative insurance for the emerging DeFi sector, incentivizing community members to invest in blockchain-based syndicates, similar to the workings of the Lloyd’s of London insurance market.

Native operates one of the larger capital pools on Nexus Mutual and also plays a traditional broker role, facilitating access to Lloyd’s for certain types of crypto-related insurance. Notably, the risk cover for the Rizzo validator on Bittensor was arranged in just four weeks. Native co-founder Dan Ross remarked on this speed, stating that, “If we did that with traditional insurance, that’s a three to six month thing at minimum.”

This is the first instance of Bittensor being underwritten, according to Ross, who noted that Team Rizzo sought the policy to attract stakers to their validator. They have successfully created a new product, underwritten a protocol, and established third-party smart-contract coverage, all with a $25 million limit within four weeks.

Following this, they will offer cover for the Babylon bitcoin staking platform in the coming weeks.

“Team Rizzo has played the long game to become one of — if not the most — consistent and performant validators on Bittensor,” said Bittensor founder Jake Steeves in a statement.