Definition ∞ A DeFi protocol drain refers to the unauthorized or malicious removal of a significant volume of assets from a decentralized finance application’s liquidity pools or treasury. This event typically arises from a security exploit, a smart contract vulnerability, or a deliberate rug pull by project creators. Such occurrences lead to substantial financial losses for users and the affected protocol.
Context ∞ Reports of DeFi protocol drains frequently dominate cryptocurrency news, serving as sharp reminders of the inherent risks within the decentralized finance sector. These incidents emphasize the critical need for extensive security audits and robust risk management strategies. They severely impact user trust and market stability within the digital asset landscape.
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