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How Does the Risk of Smart Contract Exploits Affect Trading on DeFi Option Protocols?

A bug in the protocol's code could lead to the total loss of all locked funds (collateral and premiums), a unique systemic risk in DeFi.
Greeks.Live19.11.25

How Does the Risk of Smart Contract Exploits Affect Trading on DeFi Option Protocols?

The risk of smart contract exploits is a major systemic risk in DeFi. A bug or vulnerability in the protocol's code could lead to the total loss of all funds locked in the contract, including collateral and premiums.

This risk introduces a layer of uncertainty that is not present in traditional options trading, requiring traders to assess the security and audit history of the protocol before participating.

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