[jlokier]

Low-cost insurance is an interesting idea that might actually work to smooth over some of the hard edges of "code is law".

It ought to be possible to craft an insurance policy that would pay out the $500k (or equivalent WETH/ETH) in cases like the one in this article, where the transparency of the ledger clearly shows that the tokens are unrecoverable.

As insurance companies are notorious for declining to pay out, the clear evidence trail would be helpful to allow the insuree to take the claim to a regular court for a human decision on its validity.

[jethro_tell]

Lol, so like the FDIC but you have to sue to get your money.

[jlokier]

Not really. Having the option of a lawsuit is just a backup; the possibility is what makes sure the insurer chooses to pay without one.

An insurer that knows when it doesn't have a case and will be forced to pay (plus costs) when there's clear evidence of coverage and loss will almost always pay without a fight.

However if there are high-value decisions which are not so clear cut, then having the option to go to court or some other mediation system to settle is quite useful. One of the critisms of "code is law" is the lack of mechanism for nuanced, human intervention when something unexpected happens due to a bug, design flaw or unexpected consequence that turns out to be unreasonable.

[mlac]

Code can screw up at scale. And at this point if you’re capable enough to understand the edge cases and offer insurance against them, the insurance went really cover that much.