Will DeFi return to its golden age once AI handles security?

AI is dramatically and rapidly lowering security costs.

Written by: nour

Compiled by: Chopper, Foresight News

Back in the 2020 DeFi Summer, Andre Cronje was launching new protocols almost every week—Yearn, Solidly, and countless other experimental projects came out one after another. Unfortunately, many of those projects suffered from smart contract vulnerabilities and economic attacks, causing losses for users. But the ones that survived became some of the most important protocols today.

The problem is that that era left psychological trauma across the entire industry. The industry’s direction swung sharply, and massive resources were poured into security. Multiple audits, audit competitions, and every version had to go through months of review—just to validate an entirely new idea with no proven market fit. I think most people didn’t realize how much this stifled the spirit of experimentation. Nobody is going to spend $500k on an unverified idea, then wait 6 months for an audit. So everyone just copied designs that had already been validated, then called it “innovation.” DeFi innovation didn’t disappear—it was just being strangled by incentive mechanisms.

And all of this is changing, because AI is dramatically and rapidly lowering security costs.

AI audits used to be so shallow they were almost laughable—basically limited to flagging surface-level issues like reentrancy and precision loss, things any competent auditor could spot. But the new generation of tools is completely different. Tools like Nemesis can already detect complex execution-flow vulnerabilities and economic attacks, with an astonishing depth of contextual understanding of the protocol and its operating environment. One especially standout feature of Nemesis is how it handles false positives: it has multiple agents detect things using different methods, and then another independent agent evaluates the results, filtering out false positives based on contextual understanding of the protocol logic and its goals. It really can understand nuances—for example, which scenarios make reentrancy acceptable and in which cases it is truly dangerous. Even experienced human auditors often get this wrong.

Nemesis is also extremely simple: it only requires three Markdown files, which you can add as a skill to Claude Code. Other tools go even further—some integrate symbolic execution and static analysis, and some can even automatically write formal verification specifications and check code. Formal verification is becoming accessible to everyone.

But all of this is still only the first generation of tools. The model itself continues to evolve. Mythos from Anthropic, which is expected to be released soon, is anticipated to exceed Opus 4.6 by a wide margin. You don’t need to make any changes—just run Nemesis on Mythos to immediately get much stronger results.

Combine that with Cyfrin’s Battlechain, and the entire security workflow is completely rebuilt: write code → AI-tool auditing → deploy to Battlechain → hands-on attack-and-defense testing → redeploy to the mainnet.

The beauty of Battlechain is that it removes the implied “security expectations” of the Ethereum mainnet. Users entering from other chains clearly understand the risks they face. It also provides a natural focal point for AI auditors, so they no longer have to hunt for issues in the vast ocean of the mainnet. Its security-harbor framework states that 10% of stolen funds can be used as a legitimate bounty—creating economic incentives that spur the emergence of more powerful attack tools. In essence, it’s like MEV competition, but occurring in the security domain. AI agents rapidly probe every new deployment, racing to find vulnerabilities.

The future development workflow for DeFi protocols will be:

1. Write the protocol
2. Complete AI auditing within minutes
3. Deploy with a small amount of capital to Battlechain
4. Automatically get targeted by competing AI agents
5. Get attacked within minutes
6. Recover 90% of funds
7. Fix the vulnerability
8. Redeploy

From writing code to passing real-world testing before going live on mainnet, the entire cycle shrinks from months to possibly just a few hours, and the cost compared with traditional audits is almost negligible.

Ultimately, the final line of defense will be AI auditing at the wallet level. User wallets can integrate the same AI auditing tool at the transaction-signing stage. Before each transaction is signed, the AI will audit the target contract code, read state variables to link all related contracts, map the protocol topology, understand the context, audit the contracts and the user’s transaction inputs, and provide recommendations in the confirmation pop-up. In the end, every user will run their own professional-grade auditing agent, protecting themselves from Rugs, team negligence, or malicious front ends.

Agents will safeguard DeFi protocols across the board—from the development layer, to the public-chain layer, and to the user layer. This reopens the entire space for experimental design. Those ideas that previously lacked economic feasibility due to high security costs can finally be tested. With just one person in a bedroom, you can iterate quickly and build a billion-dollar-level protocol like Andre and others did in 2020. The era of online real-world testing is back.