DeFi Insurance Calculator
Free DeFi Insurance Calculator. Estimate whether DeFi insurance is worth the premium — break-even hack size, insured vs uninsured scenarios, yield impact.
| Scenario | Insured | Uninsured |
|---|---|---|
| No Hack | -$123.29 | $0.00 |
| Full Exploit | -$1,123.29 | -$10,000.00 |
| Hack Prob. | EV Insured | EV Uninsured | Better |
|---|---|---|---|
| 0.5% | -$128.29 | -$50.00 | Uninsured |
| 1% | -$133.29 | -$100.00 | Uninsured |
| 2% | -$143.29 | -$200.00 | Insured |
| 5% | -$173.29 | -$500.00 | Insured |
| 10% | -$223.29 | -$1,000.00 | Insured |
DeFi insurance coverage varies by provider (Nexus Mutual, InsurAce, Unslashed). Always read policy terms, exclusions, and claim procedures before purchasing.
How to use DeFi Insurance Calculator
The DeFi Insurance Calculator helps you decide whether buying smart contract cover is worth the premium by comparing your expected loss without insurance to the cost of the policy. Enter your position size, the annual premium rate offered by providers like Nexus Mutual or InsurAce, the coverage ratio (what percentage of your position is protected), and the protocol's risk tier — the tool calculates your break-even hack probability, expected value of insurance, and net cost/benefit over different time horizons.
Use it when deploying capital to new or unaudited DeFi protocols where smart contract risk is elevated. The calculator factors in partial coverage scenarios (many policies cover 80–90%, not 100%), deductibles, and claim success rates based on historical data. Compare premiums across providers to find the most cost-efficient coverage for your risk profile.
Input guide and assumptions
Position Size is the total dollar value of your DeFi deposit at risk. Annual Premium Rate is the yearly cost of coverage as a percentage (typically 2–10% depending on protocol risk). Coverage Ratio is the fraction of your position the policy actually protects (often 80–100%). Protocol Risk Tier categorizes the protocol by audit status, TVL, and age — higher risk tiers justify higher premiums.
Optional fields include claim success rate (historical probability that a valid claim gets paid — ~85% for major providers), holding period (how long you plan to stay in the protocol), and alternative yield (the opportunity cost of premium capital). Output shows: annual premium cost, break-even hack probability, expected value analysis, net insurance benefit at various loss probabilities, and a recommendation based on your risk tier.
How to interpret results correctly
The hero number is the Insurance Premium — your position size times the annual rate, prorated by coverage days, so a 5% rate on $10,000 held 90 days costs about $123, not the full $500. Read it beside Premium as % of Position and Daily Cost of Insurance to feel the real drag. Effective Coverage is what actually pays out: position minus the deductible amount, so a 10% deductible on $10,000 leaves $9,000 of protection, never the headline figure.
Break-Even Hack Size is the single most useful row: it equals premium plus deductible, the minimum loss at which a claim repays what insurance cost you. Below that loss you would have been better off uninsured. The Net P&L table shows you lose only the premium with no hack, but cap a Full Exploit at premium plus deductible instead of the entire position. The Expected Value table flips to 'Insured' as hack probability rises past your premium-equivalent threshold.
Practical scenarios and planning workflow
Vetting a new yield farm: load the Degen Play preset (high tier, 10% rate, 30 days) to see whether a $5,000 deposit on an unaudited protocol justifies cover. Compare the Daily Cost against the extra APY you are chasing — if insurance eats more than the yield premium, the trade is not worth the smart-contract risk. Pair it with the <a href="/apy-apr-calculator/">APY/APR calculator</a> to confirm the headline yield actually beats the insured cost.
Sizing protection for a blue-chip lending position: the Blue Chip preset (low tier, 2.5%, 365 days) on $50,000 shows annual premium near $1,250. Use the Expected Value table to decide at what hack probability buying cover becomes the higher-EV choice, then check your underlying return with the <a href="/lending-calculator/">lending calculator</a> so the premium does not quietly erase your net interest.
Risk and execution checklist
- Before buying cover: 1) Enter the true at-risk Position Size, not your whole portfolio. 2) Set Coverage Period to your actual holding window — premium is prorated by days/365, so over-buying days wastes money. 3) Pick the Risk Tier honestly; it auto-sets the premium rate (2.5% low, 5% medium, 10% high) which you can override to the real quote. 4) Match the Deductible to the policy's stated co-pay.
- After calculating: confirm Break-Even Hack Size is a loss you genuinely fear from this protocol. If you cannot imagine an exploit draining more than premium plus deductible, the cover is theatre. Scan the Expected Value rows and note the first probability where the verdict turns 'Insured' — if real hack odds for this protocol sit below that, staying uninsured is the higher-EV play.
Common mistakes to avoid
- The most common error is reading the annual rate as the premium you pay. The tool prorates by days, so 5% annual on a 90-day position is roughly 1.25% of capital, not 5% — confusing the two makes insurance look four times more expensive than it is. The second error is ignoring the deductible: Effective Coverage and the Full Exploit P&L both reflect that you still eat the deductible amount on every claim.
- Another trap is treating the Expected Value table as a forecast. The hack probabilities (0.5% to 10%) are illustrative columns, not a measured risk for your protocol — you supply the real-world odds. People also under-size the position, insuring the deposit but forgetting accrued rewards and LP value at risk. Finally, do not assume a payout is automatic; claims depend on the provider's terms, exclusions, and governance vote.
Performance benchmarks and expectation ranges
Real-world DeFi cover premiums roughly track the tool's tiers: established lenders like Aave or Compound price near 2–3% annually, mid-tier AMMs like Uniswap or Curve around 4–6%, and fresh or unaudited protocols 8–15% or higher. Historical smart-contract exploit frequency across DeFi has averaged a few percent of TVL per year, which is exactly why the 2.5% break-even probability on a blue chip is a close call.
Deductibles on retail crypto cover commonly land at 0–20%; a 10% deductible on a $10,000 position means $1,000 stays uninsured, and Break-Even Hack Size rises by that same amount. A 90-day position at 5% costs about 1.25% of capital — sane for a medium-risk farm, expensive if the underlying yield is only a few percent. Sense-check the trade-off against your raw return using the <a href="/roi-calculator/">ROI calculator</a>.
Execution templates you can reuse
Workflow: 1) Decide the exact dollars exposed in one protocol and enter that as Position Size. 2) Set Coverage Period to the planned holding days so the premium is not over-prorated. 3) Select the Risk Tier to auto-fill a baseline rate, then overwrite it with the live quote from Nexus Mutual, InsurAce, or similar. 4) Enter the policy deductible. 5) Read Break-Even Hack Size and the Expected Value verdict before committing.
Re-run the model whenever your position changes size or you roll into a new term. If you hold several insured positions, calculate each separately and sum the premiums against total exposure rather than insuring a blended portfolio number. Keep the underlying strategy's return handy — the <a href="/profit-calculator/">profit calculator</a> tells you whether the yield still clears once the premium and deductible are subtracted.
Data hygiene and model maintenance
Premium rates and policy terms drift, so refresh the Annual Premium Rate with a live quote before each purchase rather than trusting the tier default. The defaults (2.5% / 5% / 10%) are starting points; cover for a newly exploited or depegged protocol can reprice overnight. Update Position Size as deposits, rewards, and price moves change your true exposure, and re-confirm the deductible matches the current policy wording.
Keep a short log of each policy: protocol, position insured, premium paid, deductible, coverage window, and provider. After any claim event in the ecosystem, revisit whether your assumed hack probability still feels right — a major exploit elsewhere often signals the whole tier should reprice. Stale assumptions are the silent killer here: an outdated rate or position figure quietly makes the Break-Even and EV verdicts wrong.
Final validation before capital deployment
Sanity-check the headline by hand: premium equals position times rate-over-100 times days-over-365. For $10,000 at 5% over 90 days that is 10000 × 0.05 × 0.2466 ≈ $123, matching Premium Cost. Then verify Effective Coverage is simply position minus position times deductible-percent, and that Break-Even Hack Size equals premium plus that deductible amount — the two should always sum cleanly.
Cross-check the Expected Value logic: uninsured EV at a given probability is just minus probability times position, while insured EV is minus premium minus probability times the deductible amount. Where those two lines cross is your decision threshold. If the table's 'Better' column ever disagrees with that crossover, re-enter your numbers. Confirm the daily cost also reconciles — premium divided by coverage days should equal the Daily Cost of Insurance row.
Authoritative sources
Frequently asked questions
How much does DeFi insurance cost?
Smart contract cover on Nexus Mutual costs 1.5-3.5% per year of covered amount. $100k of Aave cover = $1,500-3,500/year. Higher-risk protocols (newer, smaller) cost 4-8%. Sherlock and InsurAce offer similar pricing tiers.
Does Nexus Mutual cover all DeFi exploits?
No - it covers smart contract bugs, oracle failures, and economic exploits. Excluded: rug pulls, lost keys, phishing, regulatory actions. Read policy carefully - the 2022 Mango Markets exploit ($110M) was paid; Wormhole bridge ($325M) paid partial.
How does Sherlock differ from Nexus Mutual?
Sherlock pre-audits protocols before underwriting and uses staked watsons (security researchers) as backstop capital. Premiums are higher (3-5%) but payout is more reliable. Nexus has lower premiums (1.5-3.5%) but uses member voting, which has rejected some claims.
Should I insure stablecoin deposits?
For $100k+ in any single protocol, yes. Aave/Compound USDC at 4% APY minus 2% insurance = 2% net yield - low but capital-protected. The 2023 USDC depeg ($0.88 briefly) and the 2022 Anchor/UST collapse showed even "safe" stables need cover.
What payout rate does DeFi insurance achieve?
Nexus Mutual paid 65-75% of valid claims by USD value (some partial payouts on disputed exploits). Sherlock paid 100% of approved claims (smaller volume). InsurAce paid 80%. Always read post-mortem reports of past hacks to see how each protocol's claims process worked.
Can I get insurance for centralized exchanges?
Limited - Nexus offers "custody cover" for select CEXs but only for hacks, not insolvency. SAFU funds (Binance), FDIC for cash balances (Coinbase), and SIPC don't cover crypto holdings. Self-custody + DeFi insurance is the most comprehensive protection model.
Related calculators
← ← All DeFi & Yield calculators