The 2020 ‘DeFi Summer’ arrived with a bold promise: a financial system without intermediaries, yet transparent and accessible to anyone worldwide. However, today, billions of dollars flow through decentralized finance, exposing investors to the risk of hacks, yet almost none of it is insured.

In the last six years, since DeFi was coined, uninsured lending protocols have lost $7.7 billion to exploits, according to data source DeFiLlama. In April 2026 alone, over $600 million was lost in security events, with Drift and Kelp DAO hacks leading the way.

Read more: The $292 million Kelp DAO exploit shows why crypto bridges are still one of the industry’s weakest links

These incidents, however, exposed a bigger issue: a lack of insurance…