Luke A325_ Jenkins#81

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What is DeFi insurance and how does it work?

DeFi insurance provides protection against risks in decentralized finance, such as smart contract failures, hacks, or exchange collapses. Users pay premiums to insurance protocols like Nexus Mutual or InsurAce, which pool funds from participants. When an incident occurs, claims are reviewed and payouts are made if conditions are met. While not as established as traditional insurance, DeFi insurance adds a layer of safety for traders engaging in high-risk protocols. However, risks remain since coverage may be limited and governance is community-driven. Traders should review policy details carefully before relying on DeFi insurance.