Can DeFi go mainstream without a robust insurance ecosystem?

Decrypt just published an article about DeFi insurance: [ and as Vitalik put it: “centralized anything is evil by default, use defi and self-custody ethos did very well this week, but remember that it too has risks: bugs in smart contract code.” \[would argue not the only risk…UST 🥲\].

Which insurance protocols have you tried? Were they any good?

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8 thoughts on “Can DeFi go mainstream without a robust insurance ecosystem?”

  1. There was depeg insurance for ust available, but that’s completely different than a smart contract insurance plan.

    Another example is badger, when they got their front end hacked, the smart contract insurance didn’t cover it.

    We probably need a more comprehensive insurance system. Smart contracts are only one of the vulnerabilities.

    I imagine we will start seeing insurance companies hosting their own front ends and start offering more comprehensive insurance plans.

  2. What is holding DeFi back from going mainstream is as much as insurance as it is also user friendly UI and security. True interoperability has been a goal by many DeFi projects, but DeFi projects that took the bridge route have had more losses thanks to exploit and hacks than bearable. Few DeFi projects like [Zetaswap]( have made a breakthrough on the interoperability and user friendly front, thanks to smart contract interaction on multiple chains, and providing a straight forward approach to asset swap.

    DeFi is an important aspect of cryptocurrency going mainstream, and I believe 2023 will be the defining year for DeFi. If by 2024 DeFi still struggles to make an important impact, 2025 may not be the year of the bulls I am predicting it to be. Because if cryptocurrency will be adopted by mainstream as a better money to fiat, DeFi must succeed. DeFi is the only platform that allows cryptocurrency users full ownership of their assets, and full custody of assets is the major reasons many seek financial refuge in cryptocurrency.

  3. Nexus mutual seems like it is doing fine. Never tried it myself but hearing a lot of good things from those that did.

  4. If a user’s collateral isn’t overleveraged by a centralized, yet unregulated entity – why not?

    Especially if users aren’t misinformed or misguided by mathematically impossible returns.

    If the rules written aren’t broken and if trust is actually a thing, new systems can be built to actually last and create new options.

  5. DeFi’s primary need is privacy and security. By ensuring that hackers
    are unable to access information about an individual’s wallet, we can
    greatly reduce the number of successful hacks. This will lead to an
    increase in investor confidence and ultimately drive mainstream adoption
    of DeFi and crypto as a whole.

  6. if the mainstream needs insurance to operate with defi, then they’re not ready. I hope that in a few years, eth and avax can be the main characters of the defi massive adoption.


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