What is a re-org in blockchain consensus, and why does it matter for DeFi users?

[nihalsari]

A chain reorganization (re-org) happens when a blockchain temporarily produces competing versions of the chain, and a longer or heavier fork overtakes the current one.
This can replace recent blocks with new ones, “orphaning” the old ones.

Re-orgs can occur naturally due to network latency or maliciously in a 51% attack.
For DeFi:

DEX trades and liquidations in orphaned blocks can be reversed.

Bridges and cross-chain transfers relying on finality might release funds based on blocks that disappear.

Proof-of-Stake Ethereum’s finality gadgets (like Casper FFG) and fast-finality chains like Avalanche or Near reduce the risk window, but it’s never zero.
For large transfers, waiting for multiple confirmations—or using protocols with strong finality guarantees—is key.