Without proper risk management, trust in DeFi cannot be established. The composability of DeFi introduces a chain of potential exploitation risks, as vulnerabilities can cascade through interconnected protocols. To encourage adoption by institutional investors, a standardized framework similar to traditional finance (TradFi) is necessary, ensuring safety, transparency, and compliance.
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Without proper risk management, trust in DeFi cannot be established. The composability of DeFi introduces a chain of potential exploitation risks, as vulnerabilities can cascade through interconnected protocols. To encourage adoption by institutional investors, a standardized framework similar to traditional finance (TradFi) is necessary, ensuring safety, transparency, and compliance.