Active on-chain insurance coverage fell 20.2% from $163.2 million to $130.2 million according to CoinGecko’s report released on August 27. The crypto industry lost $3.63 billion to hacks over the past 19 months. Five of the nine tracked insurance protocols have exited the market. Cumulative payouts amount to $33 million, covering only 0.9% of total losses. In response to this contraction, major centralized exchanges like Binance are building their own self-insurance reserves of $1.16 billion, leaving smaller platforms and DeFi protocols with essentially no financial backstop against major exploits.
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