SEC-CFTC joint statement may increase institutional adoption but could bring stricter compliance requirements for exchanges and DeFi protocols.
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Cross-chain projects rely heavily on bridges to move assets between blockchains, making them vulnerable to security exploits. When a major bridge suffers a hack or vulnerability, confidence in the entire cross-chain ecosystem is shaken. This leads to heightened volatility as users withdraw liquidity, and tokens linked to affected networks face selling pressure. Conversely, projects with strong bridge security and audits may gain investor trust and price stability. Volatility also arises from speculation about whether new exploits will occur. Therefore, bridge security is not just a technical issue—it is a direct determinant of market confidence and token price performance.
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Changes in stablecoin chain distribution affect bridge safety. Concentration on one bridge increases systemic risk if exploited, potentially triggering market-wide liquidity shocks.
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