Brava Finance: Cyber and smart contract risks worry institutional investors

November 11, 2025

Technology

Institutional investors and wealth managers are concerned about the cyber and smart contract risks of blockchain-based lending and are increasingly turning to third-party insurance, new global research from Brava Finance shows.

Its study with pension funds, insurance asset managers, family offices and wealth managers who already invest in digital assets, found 20% believe protection or insurance against cyber and smart contract risks is essential for blockchain-based lending strategies. Another 70% believe it is important while just 10% say it is a ‘nice to have’.

Brava Finance, whose platform helps users access stablecoin-based credit strategies through decentralized finance (DeFi), has launched its Stablecoin SMA and first credit fund, which offers institutional-grade access via a regulated Cayman vehicle. The fund employs leading custody solutions such as Fireblocks and Northern Trust.

Around two-thirds (66%) of the investors questioned in the US, UK, UAE, EU, Brazil, Singapore, South Korea, Switzerland and Hong Kong say they have used third-party insurance products to protect against smart contract exploits. A further 31% say they are aware of the products but have yet to use them.

The research found widespread awareness of blockchain-based credit and yield strategies that can be accessed using stablecoins. Investors are most familiar with on-chain money market protocols and real-world asset backed lending but familiarity is high across all strategies they were asked about as the table below shows.

The research found more than two out of five (44%) surveyed would be comfortable or very comfortable allocating to a lending strategy on platforms without knowing who the borrowers are or what collateral is used. Around 38% would be very or somewhat uncomfortable.