One of the newly emerging financial sectors, DeFi, is facing an alarming increase of hacker attacks and scams. In the first half of 2021 alone, decentralized finance lost over $474 million to theft and fraud. Most importantly, without better security solutions, the investors may look elsewhere for more reliable financial ventures.
Solidproof, a German-based auditing company, is on a mission to enhance the security of DeFi protocols. With manual and automatic audits, this up-and-coming firm should reduce the risk of fraud and money laundering.
We took a closer look at how auditing takes place in DeFi to understand better the innovative Solidproof solutions.
Why Is Auditing Critical for DeFi Protocols?
Many companies rely on third-party auditors to check the accuracy of their records. Additionally, they may ask for independent audits to determine if their operational processes are up to date.
In decentralized finance, auditing is necessary to determine if a DeFi protocol is secure. More than often, DeFi projects fall victim to hackers due to errors in their smart contract codes. So, through auditing, they identify and eliminate these vulnerabilities, thus increasing their safety.
Auditing diminishes the risk of illicit use of a DeFi protocol. Additionally, it tells potential users that they can entrust a project with their assets. As long as the protocol receives a “successful audit” marker, they can safely invest in it.
Solidproof Manual Audit
One of the best security solutions that DeFi projects can opt for is manual auditing. This process enables developers to correct some of the protocol errors. And, one of the most reliable manual audit services comes from Solidproof.
The German company uses a professional team of audit experts to check the security of DeFi projects. Here is how it works:
1. A client requests a quote for Solidproof to audit a blockchain project.
2. The Solidproof auditors check the project for errors and smart contract bugs.
3. For example, they may add false transactions to determine the project’s risk for double-spending.
4. They communicate the errors they find to the project’s developers for fixing.
5. After the developers fix them, Solidproof runs another audit.
6. The auditing process ends after the developers fix all the risky errors.
At this point, Solidproof releases a certificate that state the project has undergone an audit successfully. Finally, the project receives a Verification Badge, which guarantees its trust and security.
Solidproof Auto Audit Tool
Like many auditing companies, Solidproof relies on manual audits to help DeFi projects increase their security. However, the company wants to improve its auditing potential by releasing an auto audit tool in September.
The new Auto Audit Tool should work like this:
1. The client accesses the tool and uploads their contract via a file or an URL.
2. The Audit Auto Tool calculates all the weak points from the available analysis tool.
3. The tool then delivers the audit results while mentioning that it is not a substitute for a proper audit.
The innovative automatic audit tool should provide clients with quick solutions for their projects. However, it doesn’t represent an authentic audit. Therefore, the client may ask for an additional manual audit.
Through the manual procedure, auditors may find vulnerabilities that the auto toll didn’t encounter. From here on, the audit continues until the developers fix all the risky errors. In the end, the Verification Badge and Successful Audit certificates should establish the project’s reliability.
Solidproof Is a Reliable Presence in DeFi
As one of the most promising audit companies in blockchain, Solidproof wants to gain a firm foothold in the industry. In this regard, it has already audited numerous projects, such as vEmpire DDAO, Binemon, and Gallant Token, among others.
Additional partnerships with Unicrypt, Etherlite, and Pathfund increase the company’s prestige and dependability.
In less than a year, Solidproof has become a Holding and Gmbh company. This is one of the highest business levels in Germany, and it proves the company’s ambitions and rapid development.
Disclaimer: This article is not intended to be a source of investment, financial, technical, tax, or legal advice. All of this content is for informational purposes only. Readers should do their own research. The Capital is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by reliance on any information mentioned in this article.
How Automatic Auditing Can Bolster DeFi Protocol Security was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
