DeFi security remains one of the most misunderstood aspects of blockchain technology, with many developers and users wrongly assuming that certain vulnerabilities are non-issues. In reality, decentralization does not guarantee safety, and even perfectly written smart contracts can be compromised if they rely on manipulated price oracles or insecure validator consensus.
According to security professionals, the concept of 'code is law' oversimplifies the reality of how decentralized systems are attacked externally. Smart contracts are not isolated from everything else, and securing a decentralized architecture requires treating all external integrations as primary attack vectors.
The experts warn that self-custody crypto cards do not necessarily mean your money is untouchable, as users often sign standing permissions that allow the issuer's spend modules to pull funds from their account. It is not who holds the seed phrase that matters but how tightly the spend is scoped and what triggers it.
Insurance in DeFi can be misleading, with policies often excluding smart contract bugs or oracle failures. Payouts may be capped, time-limited, or restricted to named protocols only. It is essential to read the fine print and get written answers on what is covered before relying on any policy.