KelpDAO Hack Pushes DeFi Toward Safer and More Mature Systems

The $293 million KelpDAO exploit is becoming a major turning point for decentralized finance (DeFi), exposing how modern crypto risks increasingly come from infrastructure and operational mistakes rather than smart contract coding flaws.

The attack, linked to weaknesses involving LayerZero bridge infrastructure, showed how connected DeFi systems have become. Instead of a direct coding error, the issue spread through shared systems used by multiple protocols, creating wider risks across the ecosystem.

According to Eugene Mamin, Chief Technical Master at Lido Labs Foundation, many smart contracts worked exactly as designed, but the real issue came from who controlled the systems around them.

Experts Say DeFi Risks Have Shifted Beyond Smart Contracts

Industry leaders argue that smart contract security has improved significantly through audits, formal verification, bug bounties and AI-assisted reviews. Sam MacPherson, CEO of Phoenix Labs, said recent crypto hacks increasingly come from weak operational security rather than broken code.

DeFi protocols today rely heavily on bridges, cloud systems, validators, governance tools and third-party software. This growing complexity means one weakness can affect several platforms at once.

MacPherson warned that when too much of the market depends on the same infrastructure, isolated failures can quickly become system-wide problems.

“Boring” DeFi Gains Appeal Among Investors

The KelpDAO incident is also changing investor behavior. Instead of chasing high yields and risky experiments, many users are now favoring stable and predictable platforms.

Mamin said trust is increasingly built around protocols that operate safely and consistently over time. He described reliability as becoming a key feature in crypto markets.

Security experts believe DeFi’s future depends not only on transparent code but also on strong governance, better operational discipline and mature risk management systems.