Definition ∞ DeFi vulnerabilities are weaknesses or flaws within decentralized finance protocols and smart contracts that malicious actors can exploit. These can stem from coding errors, design oversights, or economic manipulation vectors. Exploits of such vulnerabilities often result in substantial financial losses for users and protocol operators. Addressing these security gaps is paramount for the stability and trustworthiness of the DeFi ecosystem.
Context ∞ Reports frequently highlight instances of DeFi vulnerabilities leading to significant hacks and asset losses. The rapid expansion of DeFi applications has brought increased attention to the necessity of rigorous security audits and robust testing. Discussions center on improving code integrity and implementing better risk management practices to protect user funds in this innovative but nascent financial sector.
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