I noticed an interesting paradox in DeFi: we have built almost all the financial primitives, but we forgot the most important thing — insurance. This is a huge hole that holds back the entire ecosystem.

The problem is that current attempts to create decentralized insurance face serious structural barriers. Most solutions rely on assets that are themselves part of DeFi, which creates reflexive traps during major hacks. When the system is under attack, those assets that underpin the insurance coverage lose value the fastest. It results in a vicious cycle.

I believe the key to solving this is uncorrelated capital and a stable base of underwriters. We need to move away from schemes with crazy yields and shift to institutional-grade assets. Here’s the interesting part: when this happens, even neobanks and fintech companies will be able to integrate into DeFi without fears. They will be able to offer their users protection that truly works.

Right now, everything is focused on TVL — total value locked. But that’s the wrong metric. We need to look at TVC — total insured value. That’s a completely different story. The scalability of insurance coverage should depend on the actual capital backing it, not on the number of tokens in pools.

Programmable insurance can turn risks into tradable assets. Imagine: each protocol has a clear market signal for security, embedded directly into transactions. This isn’t just a nice idea — it could become a bridge between the crypto-native world and global finance.

This is especially important for neobanks. They will be able to offer their clients DeFi services with real protection, rather than just trusting that everything will be fine. This could truly accelerate DeFi adoption on a mass scale.