The decentralized finance (DeFi) space, driven by smart contracts, has exploded since the summer of 2020. Retail and institutional investors are jumping on the DeFi train seeking higher returns on the backdrop of an underperforming global economy hit by rampant inflation.
The budding DeFi sector offers a radical opportunity for users to earn passive income on their crypto assets. This feature has captured significant attention from retail investors, market speculators, and forward-thinking asset managers.
Per data from DeBank.com, the total value locked (TVL) in DeFi protocols increased by a staggering 2500% in 2020, surpassing the $20 billion mark by December of that year. The sector has gone from strength to strength regardless of the volatility in the cryptocurrency market, recently reaching a TVL of $100 billion per the latest data from DeFiPulse.
Unfortunately, this rampant growth has attracted bad actors aiming to siphon user funds. A recent report from London-based blockchain analytics firm Elliptic shows that DeFi scams and hacks have resulted in over $10 billion in losses in 2021.
These rampant security breaches can potentially sink new projects while simultaneously scaring off potential investors from participating in the broader DeFi ecosystem.
Chainsulting is Helping Secure the DeFi Sector
Chainsulting is a German-based company specializing in distributed ledger technology (DLT) and cryptocurrencies. The firm provides comprehensive services such as blockchain development, security audits, and consulting within the blockchain industry.
Founded in 2017, the company has a proven track record spanning years of serving most of the top 100 crypto projects by market cap. Some notable clients include DeFi heavyweights 1Inch, POA Network, Ethereum, DAI, and Unicrypt.
One of the major pain points that Chainsulting solves is the lack of proper smart contract audits. Most existing blockchain audit firms lack the domain-specific skills and experience to root out bugs, inefficiencies, and other vulnerabilities in DeFi smart contracts.
Unfortunately, many decentralized protocols have ended up in the crosshairs of cybercriminals who use sophisticated programs and tools to infiltrate popular DeFi applications. Research by Ciphertrace highlights that multiple attacks on crypto projects drained investor funds last year, with 50% of the attacks targeted at the DeFi sector.
Chainsulting has stepped up to alleviate security concerns and protect DeFi investors by offering comprehensive security and audit solutions. Currently, the company secures leading chains such as Ethereum, Binance Smart Chain, Tezos, and EOS. It also provides world-class solutions that protect numerous DeFi protocols.
Chainsulting smart contract security services help mitigate risk across the DeFi and blockchain ecosystems, helping to foster transparency and trust within the crypto community.
Why Chainsulting Audit Solutions Stand Out!
Chainsulting has introduced a radical auditing approach that differs from other blockchain security companies in the space. The firm uses German tech and security standards to ensure 100% test coverage on every audit.
The audit process involves elaborate Automated Vulnerability Tests and Manual Security Checks. The autonomous tests leverage the latest tools such as Mythril, Slither, Oyente, MythX, Solhint, HoneyBadger, allowing the audit team to root out critical vulnerabilities that could become calamitous to DeFi protocols. Meanwhile, manual testing integrates Line by Line, SWC-Registry, Overflow, CVE, and other top-notch security auditing processes.
The experienced and passionate Chainsulting team examines code by performing gas optimization and conventions checks, diagnosing areas of DeFi protocols that can be fine-tuned to become more efficient.
To further reinforce the security and efficiency of smart contracts, the team performs logic testing and verifies claims representing up to five general functions of the contract.
After the thorough audit process, auditors prepare a transparent and comprehensive report with recommendations on how dev teams can patch up loopholes such as reentrancy attacks, oracle manipulations, and other bug exploits.
Finally, the audit team grants the developers a Certificate of Compliance that signals to investors that the project is safe from exploitation by bad actors.
Chainsulting shares details reflecting all blockchain smart contract audits on their GitHub and Website. They also post-audit results on Twitter, authenticating that the project in question has acquired trust made in Germany and is green-lit for mainstream use.
A Look at the Latest DeFi Hacks
The TVL locked in DeFi has exploded over the past year, exceeding $100B in 2021, according to DeFi Pulse. Unfortunately, the fast-developing market has caught the attention of hackers looking to make a quick fortune.
As evidenced by various reports, there have been steady and increasing incidents of malicious actors deploying ingenious schemes to access some of the top DeFi apps. Moreover, the DeFi craze has resulted in a rush by developers to release new projects without giving their smart contracts the in-depth attention required to guarantee investor safety.
As a result, numerous DeFi exploits continue to take place due to security neglect by protocol backers. CryptoSec, a platform dedicated to exposing scams and hacks in the crypto world, recently revealed that there had been 73 DeFi exploits accounting for about $1.5 billion in losses.
Some of the most recent hacks have occurred on lending protocol bZx, Cream Finance, and PancakeHunny, leading to devastating losses estimated at nearly $200M over the past three months.
Author’s Thoughts
Numerous high-profile DeFi protocol exploits have accompanied the ongoing DeFi boom taking center stage in the crypto sector, highlighting the need for project backers to take the security of their smart contracts more seriously.
As a result, DeFi code audit services have gone from being viewed as an unnecessary burden to an absolute necessity for DeFi projects looking to halt the recurring theme of devastating attacks.
Blockchain security providers such as Chainsulting are fostering the rise of the blockchain by offering DeFi ventures effective security tools designed to counter the ever-present threat of cybercrime. The reputable German-based company has built a solid reputation by offering high-quality and trusted smart audit services to 150+ clients over the past four years.
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