<div id="readability-page-1"><div><ul><li>Despite billions of dollars flowing through DeFi, less than 2% of total value locked is insured, leaving most users exposed to mounting hacks and exploits.</li><li>Early DeFi insurance efforts faltered as attackers shifted from smart contract bugs to harder-to-price offchain risks like private key compromises and phishing, which now account for the largest share of losses.</li><li>Many DeFi users still prioritize yield over protection, and insurance pools often share the same vulnerabilities as the protocols they cover, prompting calls for embedded coverage, narrower policies and integration with traditional insurers.</li></ul></div></div>

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<p>Despite billions in DeFi, under 2% of total value locked is insured, exposing users to hacks. Early insurance efforts failed as risks evolved from smart contract bugs to offchain threats like phishing. Users prioritize yield over protection, leading to vulnerabilities in insurance pools, prompting calls for better coverage and integration with traditional insurers.</p>

- The DeFi sector has seen significant investment, yet less than 2% of total value locked is insured, putting users at risk of hacks and exploits.  
- Initially, DeFi insurance struggled to address evolving threats, with offchain risks now leading to most losses.  
- Users tend to prioritize yields over insurance, which has led to discussions on the need for improved coverage solutions and better integration with traditional insurance providers.

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Crypto users are choosing juicy yields over protection, putting billions at risk of hacks