Cryptocurrency project auditors need to take more responsibility regarding the smart contracts they audit.
Dyma Budorin, the CEO of Hacken, believes that the cryptocurrency industry would benefit from smart contract auditors taking more responsibility for the codes they audit.
Budorin believes that Web3 cybersecurity providers are currently failing the broader cryptocurrency industry. He lamented that there are huge blind spots in the market practices and they are impacting investors’ behaviour.
The Hacken CEO stated that a lack of accountability and transparency in the audits many providers perform isn’t enough to reassure users and the broader crypto community.
At the moment, smart contract auditors are not accountable if a token or smart contract they audited gets hacked due to a bug in the code. It is not a surprise that most of the DeFi hacks that have taken place so far this year have been projects that were audited by third parties. He said;
“They are missing tests, accountability, and transparency in ratings of cryptocurrencies. Right now, the best market practice is to get a token audit, and that’s it. There is no way of knowing who is responsible for the keys, who mints new tokens, if the tokens are properly bridged, and so on with no transparency.”
The decentralised finance (DeFi) space is one of the fastest-growing within the cryptocurrency ecosystem. However, it has been affected by numerous scam projects and hacks.
Over the past few years, DeFi projects have lost hundreds of millions of dollars to hacks. Some projects have been created by scammers and rugpulled along the way.
At the moment, investors rely on Coinmarketcap and Coingecko to gain more information about projects. However, Hacken’s CEO said those platforms are flawed since projects are manipulating their data to show very high or very low market caps. He said;
“When there is more efficient information about the accountability of blockchain companies that issue a token, [investors] will start to compare fundamentals rather than hype.”
The cryptocurrency market is down from its all-time high of $3 trillion, with the total market cap now around $1.7 trillion.