German company Solidproof is partnering with Unicrypt to support its entry into the Smart Contract audit market. The firm that offers KYC services is planning further forays into the sector and will hold its initial token offer at a date to be announced.
The partnership puts Solidproof on the fast track to becoming the provider of choice for Decentralized Finance (DeFi) projects auditing and KYC services. Its smart auditing contracts will help to identify vulnerabilities within projects through manual and automatic tests. At the moment, though, the service supports manual audits only but plans to automate them soon.
The Need: Defi-related Crime is Rising
This development comes in the wake of growing concerns about the rising cases of fraudulent activity within the DeFi space. For instance, CipherTrace, the leading Crypto Risk Intelligence firm, reports that DeFi crypto fraud hit an all-time high in Q1 this year. This number, however, is a decline in the total value of fraudulent activity within the whole crypto sector. According to the report, Defi-related criminal activity accounted for $240 million out of the global total of $432 million lost within the entire crypto sector.
Solidproof's two products will give players in the space the peace of mind that their investments are safe. The firm's KYC product will protect projects against fraudsters and individuals transacting in funds gained through illegal activity. It carries out a thorough background check to flag proceeds from corruption, money laundering, drug trafficking and financing terror.
The Benefit: Insulating Against Funds Loss
Besides establishing each user's true identity, it reveals the nature of their activities. This way, projects get to know if their sources of income are legitimate or not. So from analysing the risk associated with each customer, the tool will enable Defi projects to make informed decisions on who to trade with and otherwise.
Similarly, the firm's project auditing solution checks the soundness of a venture's smart contract. Smart Contracts are central to the functioning of DeFi projects. It follows that they must subscribe to the highest security standards. The audit solution seeks out bugs and other vulnerabilities in the contracts that may expose those projects to attacks. As such, it insulates project owners and investors from losing their funds.
Even as Solidproof looks to add to its current offering, it receives warm responses from market players. Already several projects have undergone its auditing process satisfactorily. They include BuffaloSwap, Gamelogy and Gallant Token, among many others.For more news and developments from the firm, you can check their website, Twitter handles, and the official Telegram news channel.