Definition ∞ DeFi security analysis involves the systematic evaluation of decentralized finance protocols and applications to identify and mitigate potential vulnerabilities. This assessment scrutinizes smart contract code, protocol design, and operational procedures for weaknesses. The objective is to safeguard user assets and maintain the integrity of financial operations. It is a critical component of risk management.
Context ∞ The rapid growth of the DeFi sector has made security analysis a paramount concern due to frequent exploits and financial losses. Independent audits, bug bounty programs, and formal verification methods are standard practices employed to enhance protocol security. The ongoing challenge is to keep pace with innovation while ensuring robust protection against emerging threats.
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