Code reuse in on-chain protocols can amplify the spread of contract vulnerabilities. When protocols share or fork code, a flaw in the original codebase, like a reentrancy bug, can propagate across multiple contracts. This is exacerbated in DeFi, where composability links protocols, allowing an exploit in one to impact others. Historical cases, like the 2016 DAO hack, show how unpatched reused code can lead to cascading failures. Mitigating this requires rigorous audits, modular design, and timely upgrades, but widespread adoption of vulnerable libraries remains a risk.