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

Byline: nour

Compiled by: Chopper, Foresight News

During the DeFi Summer around 2020, Andre Cronje was launching new protocols almost every week. Yearn, Solidly, and a large number of other experimental projects all came to life. Unfortunately, many of those projects ran into contract vulnerabilities and economic attacks, causing losses for users. But those that survived became today’s most important set of protocols.

The problem is that that era left the entire industry with psychological scars. The industry’s momentum swung sharply, pouring vast resources into security. Multiple audits, audit competitions, and every version had to go through months of review—just to validate a brand-new idea with absolutely no market fit. I think most people didn’t realize how much this crushes the spirit of experimentation. Nobody would spend $500k to audit an unproven idea and wait for 6 months. So everyone just copied proven designs and called it innovation. DeFi innovation hasn’t disappeared—it’s just being strangled by incentive mechanisms.

And all of this is changing, because AI is rapidly driving down security costs.

AI auditing used to be so shallow it was almost laughable—basically only flagging obvious issues like reentrancy and precision loss, problems that any competent auditor could catch. But the new generation of tools is completely different. Tools like Nemesis can already find complex execution-flow vulnerabilities and economic attacks, with astonishing depth of contextual understanding of a protocol and its operating environment. One particularly striking thing about Nemesis is how it handles false positives: it uses multiple agents to detect using different methods, and then another independent agent evaluates the results—filtering false positives based on context-aware understanding of the protocol logic and its goals. It really understands subtle nuances, like which scenarios make reentrancy acceptable and which ones are truly dangerous. Even experienced human auditors often get this wrong.

Nemesis is also extremely simple: you just need three Markdown files to add it as a skill to Claude Code. Other tools go even further. Some integrate symbolic execution and static analysis, while others can even automatically write formal verification specifications and verify code against them. Formal verification is becoming accessible to everyone.

But all of this is still only the first generation of tools. The model itself is also continuously evolving. Anthropic’s Mythos, expected to be released soon, is anticipated to have capabilities far beyond Opus 4.6. You don’t need to make any changes—just run Nemesis on Mythos, and you’ll instantly get a much stronger effect.

Combine that with Cyfrin’s Battlechain, and the entire security workflow gets completely rebuilt: write code → AI tool audit → deploy to Battlechain → real-world offensive/defensive testing → redeploy to mainnet.

The beauty of Battlechain is that it removes the implied “security expectations” of Ethereum mainnet. Every user entering via cross-chain clearly understands the risks they face. It also gives AI auditors a natural focal point, so they don’t have to search blindly in the ocean of the mainnet. Its safety 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 tooling. In essence, it’s like competition driven by MEV, but happening in the security domain. AI agents detect every new deployment at the fastest speed, rushing to find vulnerabilities.

The future development workflow for DeFi protocols will be:

Write the protocol

Complete an AI audit within minutes

Deploy to Battlechain with a small amount of capital

Automatically get targeted by competing AI agents

Get attacked within minutes

Recover 90% of the funds

Fix the vulnerabilities

Redeploy

From finishing code to passing real-world validation and then going live on mainnet, the whole cycle shrinks from months down to possibly just a few hours. Costs compared to traditional audits become almost negligible.

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

Agents will guard DeFi protocols end-to-end across the developer layer, the public-chain layer, and the user layer. This reopens the entire space for experimental design. Those ideas that once couldn’t be economically feasible because security costs were too high can finally be tested. One person in a bedroom can iterate quickly and build a billion-dollar-level protocol—just like Andre and others did in 2020. The era of real online testing is back.