Lead · Risk Identification
Traditional insurance sells the promise that 'houses in the same city won't all burn down the same night.' DeFi insurance is trying to sell a promise nobody can honestly guarantee — because under composability, they genuinely might all burn together.
Natalie Brooks
·
August 23, 2026
The DeFi ecosystem's current Total Value Locked is estimated to sit somewhere between $80 billion and $160 billion (varying quite a bit across different statistical methodologies), but according to industry figures like Nexus Mutual founder Hugh Karp, the actual insurance-covered proportion is under 2%. This gap, to some extent, is a piece of the puzzle the entire industry tacitly acknowledges...