Risk management in a world without bailouts

Bailouts are intended to be a last resort measure to save critical businesses on the verge of implosion. However, when they are expected by an entire industry it creates a moral hazard as business leaders are no longer incentivized with proper risk management. This leads to risky decision making as they want to maximize profits without any care for tail end risk knowing a backstop exists. In crypto, there is no lender of last resort, which means no one can bail you out. While this eliminates this conflict of interest, it means there is a critical need for proper insurance and hedging options to adequately manage risk.