Definition ∞ A DeFi audit failure occurs when a decentralized finance protocol’s security review misses critical vulnerabilities, leading to a subsequent exploit. This situation signifies that the audit process, despite its purpose, did not adequately identify weaknesses in the smart contract code or system design. Such failures can result from incomplete scope, auditor oversight, or the emergence of novel attack vectors post-audit. The consequence is often significant financial losses for users and a loss of trust in the audited protocol.
Context ∞ DeFi audit failures remain a persistent and concerning issue, frequently reported in crypto news when protocols suffer hacks despite prior security assessments. The industry faces an ongoing debate about the efficacy and standardization of audit practices. Enhancing audit rigor and implementing continuous security monitoring are critical areas of focus for the sector’s long-term stability.
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