Serverless applications face challenges such as traceability, bloated libraries, emulating production hardware, and single responsibility due to their distributed nature. Open-source serverless libraries like aioboto3, DAZN Lambda Powertools, Lambda API, and AWS Serverless Express help address these concerns by providing tools for asynchronous communication with AWS services, bootstrapping specific tooling, implementing security measures, and abstracting away complexity through familiar frameworks and middleware. These libraries enable developers to quickly troubleshoot, diagnose, and resolve failures in serverless applications while maintaining data integrity and reducing duplication of effort.