According to Patrick McCorry, there is a significant friction between the deployment of immutable smart contracts and effective user protection in the crypto market. McCorry warns that if regulations focus solely on encouraging developers to create truly immutable smart contracts, it could undermine long-term user safety. For crypto traders, this highlights a potential risk: once an immutable contract is deployed, vulnerabilities or unforeseen issues cannot be patched, increasing the exposure to permanent losses and exploitation. This regulatory approach could affect the security landscape of DeFi protocols and alter risk assessment strategies for active traders. Source: Patrick McCorry

According to dYdX Foundation, the DYDX Whitepaper provides a detailed outline of more than 20 distinct risk categories that could impact the ecosystem. For traders and investors, key risks highlighted include potential validator downtime and slashing penalties, vulnerabilities within smart contracts, security issues related to cross-chain bridges, and the risk of governance capture through voting concentration. These factors are critical for assessing the potential volatility and long-term security of the DYDX token and its underlying platform.