What Is the Primary Risk Associated with the “Code Is Law” Nature of Smart Contracts?

The primary risk is that any bugs, vulnerabilities, or exploits in the underlying code become permanent and unchangeable once deployed. Since the code automatically executes, a malicious actor can exploit a flaw to drain funds without recourse or intervention.

This lack of human oversight means there is no central authority to reverse faulty transactions or patch vulnerabilities post-deployment. Auditing is crucial but does not eliminate all risk.