DeFi Security Vulnerabilities and Their Implications for DEX Investment Strategy
The decentralized finance (DeFi) sector, once hailed as the future of open finance, has become a hotbed for security vulnerabilities in 2025. As decentralized exchanges (DEXs) and cross-chain protocols scale, operational risks have surged, with August 2025 marking a grim milestone: $163 million stolen across 16 exploits, a 15% monthly increase [1]. These incidents are not isolated but part of a broader trend where DeFi protocols and cross-chain bridges account for 80% of total crypto losses this year [2]. For investors, understanding these risks is no longer optional—it is existential.
The Anatomy of DeFi Vulnerabilities
Smart contract flaws remain the primary attack vector. In August alone, four DEX protocols were exploited for…
