DeFi protocols can embed an "insurance-first mechanism" to reduce users' initial capital losses. By integrating insurance pools or smart contract-based coverage, protocols can automatically allocate a portion of funds to protect against hacks, bugs, or market volatility. Users deposit funds, and a small percentage is diverted to a decentralized insurance vault, which compensates losses under predefined conditions. This builds trust, especially for new users, by minimizing risks without requiring external insurance purchases. Protocols like Nexus Mutual demonstrate feasibility, though scalability and cost-efficiency remain challenges. Such mechanisms could enhance DeFi adoption by prioritizing user security.