DeFi Insurance: How to Protect Your Crypto From Smart Contract Risks

Smart contract exploits have stolen billions from DeFi users. DeFi insurance protocols now let you cover your positions. Here is how they work.

DeFi has lost over $10 billion to smart contract exploits, hacks, and protocol failures since 2020. DeFi insurance protocols allow users to purchase coverage against specific risks — smart contract bugs, stablecoin depegs, oracle manipulation — paying a premium for protection. It is an emerging but increasingly important layer of the DeFi stack.

How DeFi Insurance Works

What DeFi Insurance Covers and Does Not Cover

Is DeFi Insurance Worth It?

For allocations above $10,000 in any single DeFi protocol, insurance is worth considering. At 2-3% annual premium, insuring a $50,000 position costs $1,000-1,500/year — a fraction of the potential loss from an exploit. For Steyble-integrated protocols, the risk is mitigated by our focus on audited blue-chip protocols. But insurance adds an additional layer for large positions that nothing else can replicate.