Insurance Protocol
A DeFi platform where users pool funds to cover losses from hacks, bugs, or other failures. You pay premiums to get protection for your crypto deposits.
Example
Buying cover on Nexus Mutual for your Aave deposits. If Aave gets hacked and you lose funds, you can file a claim to get compensated.
Related Terms
Tools & Protocols
⚙️How It Works
- 1
Choose Coverage
Select which protocol or risk you want to insure
- 2
Pay Premium
Pay a fee based on risk level and coverage amount
- 3
Incident Occurs
If covered event happens (hack, bug), file a claim
- 4
Claim Assessment
Token holders vote on whether claim is valid
- 5
Payout
If approved, receive compensation from the pool
📊Key Numbers
$500M+
Total Cover Available
across all protocols
2-10%
Typical Premium
annual cost
$100M+
Claims Paid
historical payouts
⚠️Risks & Warnings
- •Claim Denial
Not all claims are approved - coverage terms matter
- •Pool Depletion
Major hack could exceed available funds
- •Oracle Risk
Insurance protocols rely on accurate hack detection