How Could a Decentralized Insurance Protocol Be Designed to Protect against 51% Attacks?

A decentralized insurance protocol could be designed using smart contracts on a blockchain. Users would pay premiums into a capital pool, and in return, receive a policy that covers losses from a confirmed 51% attack.

The protocol would need a reliable, decentralized oracle to verify that an attack, such as a deep blockchain reorganization, has occurred. Claims could be automatically paid out from the capital pool to policyholders once the oracle confirms the event.

The governance of the protocol, including setting premiums and validating claims, could be managed by a decentralized autonomous organization (DAO) composed of token holders.