@opencover
What Good Protocol Protection Should Feel Like in DeFi
Risk exists everywhere, offchain and onchain. In DeFi, protocol risk is embedded throughout the stack.
It starts at the code layer, where smart contract vulnerabilities can sit unnoticed until exploited, as seen in the recent ~$110M Balancer v2 incident.
It extends to economic design flaws, such as the $100M oracle manipulation of Mango Markets, where price feeds were the attack vector.
It takes the form of liquidation and accounting failures, such as Stream Finance’s $93M collapse.
And it reaches governance and centralization risks, like Beanstalk’s $180M flash loan governance attack.
In a composable ecosystem, failures can cascade. A single exploit can create second-order losses across vaults, aggregators, and downstream protocols.
Even well-audited protocols remain exposed because risk does not live in a single contract. It is structural.