What is DeFi Insurance

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Transcript

00:00In the dynamic world of DeFi, innovation brings risks.

00:03From smart contract vulnerabilities to protocol exploits, a safety net is crucial.

00:09DeFi insurance includes blockchain-based mechanisms that protect users against risks in decentralized finance.

00:17Coverage includes events like smart contract failures, protocol hacks, and stablecoin de-pegs.

00:23DeFi insurance operates by pooling funds from users to cover claims,

00:27ensuring quick and transparent payouts.

00:30Users pay premiums into a shared pool, which is managed by a smart contract for risk assessment and claim processing.

00:38Benefits include transparency, efficiency, accessibility, and community governance, all enhancing user trust.

00:45However, challenges like regulatory uncertainty, coverage limitations, and protocol risks must be considered.

00:51In conclusion, DeFi insurance is key to safeguarding digital assets and fostering trust within the decentralized finance landscape.

01:00Flow of DeFi in child care.

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