DEX in the City: KelpDAO vs. LayerZero: Who Is Liable When a DeFi Protocol Is Hacked?

DeFi faces an inflection: rising exploits and unclear liability force the industry to choose safety, accountability, and programmable payments for AI agents.

Key Takeaways

DeFi hacks surged in 2025—attackers exploit dependencies (oracles, bridges, multisigs); audits alone fail. Improve dependency audits, layered defenses, and operational security.
Legal responsibility remains murky: plaintiffs sue broadly and defaults influence liability. Platforms must accept accountability, disclose subprocessors, and prepare for subpoenas and litigation.
Balance permissionlessness with user safety by adding practical constraints (rate limits, asset restrictions). Design choices will shape regulatory responses and protocol survival.
Amex’s Agentic Commerce shows liability matters: tokenized agent identity, programmable guardrails, and an issuer-backed error guarantee unlock agent adoption.
Blockchain offers durable alternatives: on-chain agent wallets, micropayments, and composable settlements. Prioritize cryptographic primitives, throughput, and secure composability now.
Act now—stop deflecting blame, adopt AI responsibly, accelerate secure protocol work, and educate broader communities to reduce the risk of heavy-handed regulation.

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