There is no trust in DeFi without proper risk management

DeFi's composability creates cascading exploit risks while protocols handle risk idiosyncratically. Institutional adoption demands TradFi-style standardized frameworks.

Opinion by: Robert Schmitt, founder and co-CEO at Cork

DeFi has entered its institutional phase. As large investors dip their toes into crypto ETFs and digital asset treasuries (DATs), the ecosystem is gradually evolving into an institutional-grade financial system in its own right, with the introduction of new financial instruments and digital counterparts of well-established ones.

​DeFi’s current growth exposes mounting risks that could lead to trust roadblocks. For institutions to confidently onboard, the ecosystem must implement stronger risk guardrails and resilient infrastructure. 

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