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

AI is driving down security costs at an astonishing speed.

Byline: nour

Edited by: Chopper, Foresight News

In DeFi Summer back in 2020, Andre Cronje was rolling out new protocols nearly every week—Yearn, Solidly, and a large number of other experimental projects came out one after another. Unfortunately, many of those projects suffered contract vulnerabilities and economic attacks, causing losses to users. But the ones that survived became some of the most important protocols today.

The problem is that era left the entire industry with psychological scars. Market sentiment flipped sharply, and massive resources were poured into security. Multiple audits, audit competitions, every version had to go through months of review—just to validate a brand-new idea with absolutely no market fit. Most people probably didn’t realize how much this crushes the spirit of experimentation. Nobody would spend $500k on an unverified idea and wait 6 months for an audit. So everyone just copied designs that had already been validated, and 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 driving down security costs at an astonishing speed.

AI audits used to be so shallow they were almost laughable—basically only able to flag surface-level issues like reentrancy and precision loss, problems that any competent auditor could spot. But the new generation of tools is completely different. Tools like Nemesis can already find complex execution-flow vulnerabilities and economic attacks, with astonishingly deep contextual understanding of a protocol and its operating environment. One especially standout feature of Nemesis is how it handles false positives: it makes multiple agents detect using different methods, and then another independent agent judges the results—filtering false positives based on contextual understanding of the protocol logic and its goals. It really can understand subtle nuances, such as in which scenarios reentrancy is acceptable and in which cases it’s truly dangerous. Even experienced human auditors often get this wrong.

Nemesis is also extremely simple: you only 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 automatically write formal verification specifications and verify code. Formal verification is becoming usable by everyone.

But all of this is still just first-generation tooling. The model itself is continuously evolving. Mythos, which Anthropic is set to release, is expected to far exceed Opus 4.6. You don’t need to make any changes at all—just run Nemesis on Mythos and you’ll immediately get much stronger results.

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

The beauty of Battlechain is that it removes the implicit “security expectations” of the Ethereum mainnet. Users coming in via cross-chain all clearly understand what risks they face. It also gives AI auditors a natural focal point, so they no longer have to search aimlessly across the mainnet ocean. Its security-harbor framework states that 10% of stolen funds can be used as a legitimate bounty—creating economic incentives that drive the emergence of more powerful attack tooling. In essence, it’s competition similar to MEV, but happening in the security domain. AI agents quickly detect every new deployment at the fastest pace, racing to find vulnerabilities.

The future process for DeFi protocol development will be:

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

From finishing the code to being validated by real-world testing and then going live on the mainnet, the entire cycle compresses from months down to possibly just a few hours. Compared with traditional audits, the cost is nearly negligible.

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

Agents will safeguard DeFi protocols end to end—from the development layer, to the public chain layer, to the user layer. This reopens the entire space for experimental protocol design. Those ideas that used to be economically unfeasible due to high security costs 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 online real-world testing is back.