What Risks Are Introduced by the “Code Is Law” Nature of Immutable Smart Contracts?

The primary risk is that any bugs or flaws in the smart contract code become permanently enforced and unchangeable once deployed. If a vulnerability is exploited, the contract's funds can be drained without recourse, as the code dictates the execution.

This immutability also means that legal or regulatory changes cannot be easily incorporated, leading to a risk of non-compliance. Errors in the initial code become permanent, high-stakes liabilities.