@thomasyvbaumbac

Hacks in DeFi protocols undermine confidence beyond their immediate ecosystem. Large exploits drain liquidity, disrupt lending markets, and spark fear about systemic vulnerabilities. Since DeFi protocols are interconnected, one failure can cascade into collateral losses elsewhere. Market-wide sell-offs often follow, as investors rush to safer assets or exit positions entirely. Media coverage magnifies fear, further pressuring prices. Even unaffected protocols experience reduced usage, slowing sector growth. While hacks highlight risks, they also accelerate improvements in audits and security standards. Thus, major exploits serve as painful reminders of immature infrastructure but also catalysts for industry resilience.

0 reply

0 recast

0 reaction