Let’s use the helium-4 nucleus as an example.
Since He-4 consists of 2 protons and 2 neutrons, its mass is roughly 4u. But look carefully at the data:
Mass of 2 protons and 2 neutrons
Mass of 1 helium-4 nucleus
Did you notice that the mass of a He-4 is smaller than the mass of the 2 protons and 2 neutrons that formed it?
The difference between the mass of a nucleus and the mass of its constituent nucleons is called the mass defect, Dm. In other words, for a nuclide,
For the He-4,
How do we interpret the mass defect? Consider the system consisting of the 2 protons and neutrons. The system is at a higher energy level when the protons and neutrons are at infinite distances apart, compared to when they are bound together as a helium nucleus. From the mass-energy equivalence principle, the mass defect is merely a reflection of the loss of energy by the system. The mass defects of nuclides have been measured to incredibly high precision and have provided evidence for the mass-energy equivalence principle.
Concept Test 3610
 This is similar to the situation of the electron and proton bound in a hydrogen atom, or the Moon and Earth bound to each other; Just like EPE and GPE are negative due to the attractive electrical and gravitational forces, nuclear potential energy is negative due to the attractive nuclear forces.