Defi Guardian

The Need: Why DeFi Insurance Matters Right Now Massive Financial Losses in DeFi

In 2023, over $1.7 billion was stolen across crypto platforms, with $1.1 billion directly targeting DeFi protocols. The first half of 2025 has already seen $2.5 billion lost to hacks and scams, with $1.5 billion attributed to a single exchange heist—highlighting the ongoing magnitude of risk Overall, $2.2 billion was stolen through various hacks in 2024, reinforcing that DeFi remains a prime target.

Recurring High-Profile Breaches

Major exploits include the Poly Network ($610M) and Ronin ($540M) breaches—multi-chain disasters that show the scale of DeFi vulnerabilities.

Even newer protocols aren’t immune. For example, Cetus Protocol lost ~$223M in 2025, and Cork Protocol lost ~$12M—despite prior audits.

Trust & Adoption at Risk

DeFi continues to attract massive capital (hundreds of billions TVL), but repeated exploits erode user trust. Many investors see centralized platforms as safer—even though those have known risks—revealing a critical insurance gap.

DeFi Guardian: Our Solution Product Vision

DeFi Guardian is a decentralized, cross-chain insurance protocol that lets users buy insurance coverage in PYUSD protected by community-backed capital (LPs), with claims adjudicated on Hedera and payouts executed on Ethereum/Arbitrum.

Core Features & Flow

1. User-Centric Coverage

Users select protocol, coverage amount, and term. Pay premium in PYUSD (on Arbitrum/Ethereum). Receive Policy NFT on Hedera as proof of coverage.

1. Decentralized Capital Backing

LPs deposit PYUSD into separate LP vaults. Premiums are split: 70% to LPs (yield), 30% to reserve for claims. LPs receive gPYUSD-LP tokens that reflect capital share and governance power mirrored on Hedera via CCIP.

1. Cross-Chain Orchestration

Chainlink CCIP glues everything together: Sends policy data from Arbitrum → Hedera. Propagates claim decisions from Hedera back to Arbitrum for payouts.

1. Claims Governance

Claims are submitted by users or UI prompt. LPs vote on claims using their vPower (mirrored LP staking power). If approved and quorum met, a CCIP message triggers payout from the PayoutVault.

1. Safety & Implementation Features

Allowlisting ensures cross-chain messages are from expected chains/contracts. Minimum controls: cooldown on LP withdrawals, voting period, and quorum thresholds. Receipts & NFTs enhance transparency—coverage and claims are auditable, trackable NFTs.

Impact Statement

DeFi Guardian provides a critical assurance layer in a world where billions are lost to hacks annually. By empowering users to buy protection with PYUSD backed by transparent, community capital, and by resolving claims via decentralized governance and NFTs, this product restores confidence and unlocks safer DeFi growth.

Component Description & Deliverables PremiumVault - Collect PYUSD, split to LP/Payout, send CCIP to PolicyManager (native-only). LPVault - Accept LP deposits, mint shares, support withdrawal with cooldown, CCIP sync. PolicyManager (Hedera)- Receive policy terms via CCIP, mint NFT, store policy. VotingMirror - Mirror LP shares as vPower for claim voting via CCIP. ClaimManager (Hedera) - Receive claim, collect votes, finalize, send CCIP payout if approved. PayoutVault (Arbitrum) - Receive CCIP approval, payout PYUSD. Frontend UI - Premium buying, LP staking, policy display, claim submission, governance voting.