@phoenixia

DeFi protocols lost $680M to exploits in 2025, down 40% from prior years, yet vulnerabilities like reentrancy persist. A robust investment framework starts with auditing: prioritize platforms using formal verification (58% adoption rate) and bug bounties over $1M. Assess economic risks via TVL stability—aim for >$5B—and governance decentralization to avoid oracle manipulations. Diversify across chains, capping exposure at 20% per protocol, while monitoring daily loss rates (0.00128% for leaders like Aave). User tools like Chainalysis aid in tracking; combine with sentiment analysis for early red flags. This structured approach minimizes 62.5x risk reduction, turning DeFi into a viable 15-25% yield play despite volatility.

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