Pool Drain

Definition ∞ A pool drain refers to the rapid and often unauthorized removal of a substantial portion or all of the liquidity from a decentralized finance (DeFi) liquidity pool. This action typically results in significant financial losses for liquidity providers. It is often a consequence of malicious exploits or fraudulent schemes. This event severely disrupts the stability of a DeFi protocol.
Context ∞ Pool drains are critical security incidents in the DeFi space, frequently reported in crypto news as exploits or rug pulls. Such events severely impact investor trust and highlight the inherent risks associated with providing liquidity to nascent or unaudited protocols. They underscore the importance of rigorous security audits and due diligence in the DeFi sector.