Veda founder warns vault users against misconceptions of safety

Sunand Raghupathi, the founder and CEO of Veda, wants DeFi users to stop treating vaults like they’re FDIC-insured checking accounts. His core message is blunt: onchain vaults are structurally closer to hedge funds than savings products, and the sooner users internalize that, the fewer people get hurt. The warning comes at a time when vault infrastructure is quietly becoming the backbone of institutional DeFi. Veda’s own vaults power Kraken’s DeFi Earn product, which has pulled in over $600 million in deposits with more than $100 million in inflows since mid-2025. That kind of capital flow makes the “is this safe?” question considerably more expensive to get wrong. The risk model has shifted Raghupathi’s argument centers on a subtle but important evolution in where DeFi risk actually lives. For years, the nightmare scenario was a smart contract exploit: a bug in the code that lets an attacker drain a protocol overnight. That hasn’t disappeared, but it’s no longer the primary threat vector for well-audited vault systems. Instead, the risks have migrated to the operational layer. Think key management, multisig governance setups, and the human decisions around how strategies get deplo...