DeFi can offer valuable opportunities but those opportunities come with risks, like security vulnerabilities. The Cozy v2 Protocol (Cozy v2) offers a way to protect against those risks.

In this post, we walk through the process of buying protection on Cozy v2 step by step.

Step 1: visit Cozy and choose a market

Visit the Cozy v2 app. You'll see a list of available markets, each representing a specific DeFi protocol or asset. Find the one for which you want protection, like Lido staked ETH (stETH).

Step 2: enter an amount of protection

Decide how much protection you need. Enter the amount in the provided field.

Step 3: purchase protection

Click "Buy Protection" and follow the prompts. Connect your wallet and complete the transaction. Once confirmed, you've bought protection.

Step 4a: sell back your protection

If you no longer need your protection, you can sell it back to the protocol at any time. This means that you can keep your protection for as little or as long as you like, with no lock-ups or expirations.

Step 4b: claim your payout if the market triggers

If a hack or vulnerability occurs, you can claim your payout. Visit the Cozy Finance website, go to the relevant market, and click "Claim." Follow the instructions to complete the claim and receive your payout.

Conclusion

Buying protection on Cozy v2 is a simple way to hedge against smart contract risks. Try it today at cozy.finance.

Disclaimers: Investing in DeFi protocols and assets carries inherent risks. This guide is for informational purposes only and not financial, investment or other advice. Please refer to specific market terms to learn more about coverages and risks. Always do your own research and consult a financial professional before making investment decisions. This material and the Cozy protocol are not intended for use by US persons.