DeFi insurance platforms provide decentralized coverage to protect users from risks associated with cryptocurrency, such as smart contract bugs, exchange hacks, or liquidity pool failures. These platforms allow users to pool funds into a shared insurance fund, with payouts made to insured parties in case of specific covered events. For example, if a DeFi platform is hacked, the insurance pool may reimburse affected users. DeFi insurance uses blockchain technology to offer transparent, trustless, and efficient insurance services without intermediaries.