With an industry as nascent and technical as blockchain, mass adoption of decentralized applications (dApp), particularly dealing with Finance, will move slowly until enough trust has been generated with the general public. This can be done slowly as people cautiously use them and wait to see if any issues occur, or these applications can be independently audited using a consistent set of standards and provide a rating or certification on the code, assessment of the project’s development team, and recommendation on its legitimacy. By creating this environment of trust, the DeFi ecosystem on Cardano will grow faster and attract a wider range of people.
The average user or investor does not have the technical expertise to read the code in a smart contract and understand if there is anything malicious included in it. Many people will want to participate in these applications but lending any significant amount of crypto to an unverified application is unnerving for people, compounded by the fact that it is a decentralized entity that they cannot go to and complain to customer service. Without trust that these applications were written properly to do the things they promise, there will not be mass adoption.
But how can we trust a paid audit firm to be impartial? The answer is we cannot. We have seen Enron, WorldCom, Tyco, and countless other instances of paid auditors issuing fraudulent attestations to keep the client happy and continue earning audit and consulting fees. We also have hundreds of new Audit Firms popping up and performing smart contract audits which the public is unfamiliar with, have no history or reputation to draw on, and therefore not much faith can be placed in their results and opinion. We must create a new audit paradigm to change the way audits are chosen and paid for, as well as a trusted organization that the public can build a relationship with and have faith in the audit opinions it produces. The world is finally waking up to the need for decentralization and it is at the core of blockchain. So why would we accept our audit services meant to protect our investments coming from centralized organizations? Enter Smart Contract Audit Token Decentralized Autonomous Organization.
There needs to be Smart contract audit standards developed and consistently applied by independent decentralized organizations, which can apply a clear rating to the dApp and inform the public that they are safe to use. It needs to assess the code used in the smart contracts, assess the development team, including their backgrounds and history to determine if they have a history of rug pulls or other unscrupulous behavior. But more importantly, we need a decentralized DAO created which will have audit projects chosen by the community and funded entirely though their treasury, to avoid the conflict of interest that arises from paying an auditor for their service. A DAO that can be updated and molded by its community to adapt to any new unforeseen audit risks that may arise as the industry evolves and matures.
We are big believers in auditor independence but would also like to highlight another aspect of why we are trying to transform the current audit system – the fact that not being rich should not prevent anyone from obtaining a smart contract audit. With basic audits costing 5K to 10K USD and complex audits as much as 100K USD, this creates a system where only extremely well-funded or independently wealthy dev teams can afford an audit for their smart contracts. This high cost of audit as a barrier to entry is one of the reasons we have created the Smart Contract Audit Token. Nobody ever has to pay for our audit services. The audits are funded by our Decentralized Autonomous Organization’s treasury. If Cardano or blockchain at large is truly meant to be for everyone, then we need to have certain critical infrastructure in place that allows anyone to build their vision, regardless of how wealthy or well-funded they are. Critical infrastructure such as free access to audit services. A resource where dev teams can obtain a comprehensive audit, receive feedback on any bugs or potential exploits they were unaware of, and demonstrate to the general public that their protocols are safe to use. Providing access to these critical pieces of infrastructure will: (1) increase competition which improves quality and lowers price; (2) increase innovation which bring cool new products to market; and (3) ultimately expedites blockchain adoption for the masses.