Institutional investors and wealth managers are becoming increasingly concerned about the cyber and smart contract risks linked to blockchain-based lending, with the majority now considering insurance protection a key requirement, new research from Brava Finance shows.
The global survey of 200 institutional investors found that 20% believe protection or insurance against cyber and smart contract risks is essential for blockchain-based lending strategies, while a further 70% regard it as important. Only 10% described it as merely “nice to have.”
The study also revealed that two-thirds (66%) of respondents have already used third-party insurance to protect against smart contract exploits, while another 31% said they are aware of such products but have not yet used them. The findings highlight a clear trend toward professionalising risk management in decentralized finance (DeFi) and reflect growing confidence in institutional-grade insurance solutions.
Brava Finance noted that respondents demonstrated strong familiarity with blockchain-based credit and yield strategies, particularly those involving on-chain money market protocols and real-world asset-backed lending. However, despite this awareness, opinions remain divided on transparency and borrower visibility: 44% of investors said they would feel comfortable allocating to blockchain lending platforms without knowing borrower identities or collateral details, while 38% admitted they would be somewhat or very uncomfortable doing so.
According to Brava, the results underscore how investors are balancing enthusiasm for digital-asset yield opportunities with a heightened awareness of operational and cyber risks. The company said institutional allocators are now demanding structured safeguards, including insurance and regulated custody, as blockchain-based lending continues to move into mainstream finance.
The research covered investors in the US, UK, UAE, EU, Brazil, Singapore, South Korea, Switzerland, and Hong Kong, reflecting a global view of how traditional finance is approaching DeFi-linked risk and protection.
