Definition ∞ A decentralized finance hack refers to a malicious exploit targeting vulnerabilities within smart contracts, protocols, or associated infrastructure of a DeFi application, resulting in unauthorized asset loss or manipulation. These security incidents often exploit logic errors, reentrancy flaws, oracle manipulation, or flash loan attacks. Such events underscore the inherent risks in nascent decentralized systems and the critical need for robust security audits. They represent significant setbacks for user trust and protocol stability.
Context ∞ Decentralized finance hacks are frequently reported in crypto news, highlighting the ongoing security challenges within the DeFi ecosystem. A key discussion involves the effectiveness of pre-deployment audits and bug bounty programs in preventing such exploits. Future efforts will focus on enhancing smart contract security standards, improving real-time monitoring systems, and developing more resilient oracle designs to mitigate these risks.
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