Millions of dollars are lost annually in online hacks that exploit vulnerabilities in smart contracts, and the crypto space suffers from a lack of investor engagement due to illiquidity and volatility in trading markets. Unless we first secure contracts that operate at the intersection of real users and real funds in real-life use-cases and then incentivize investors to enter and participate in the market, the crypto and blockchain spaces will continue to face an uphill battle in terms of adoption and acceptance. Here, we discuss how Bancacy and Quantstamp are working together to solve not only the problem of secure smart contracts but the issue of low investor interest in volatile crypto markets as well.
Quantstamp delivers security monitoring software to detect suspicious activity in smart contracts, including changes in smart contract ownership, changes in token supply, overflow and underflow detection, and other attempts to game contracts.
Bancacy has a strong team of smart contract developers and directly caters to need better liquidity and volatility management in the crypto space. Together, they are working to not only secure the blockchain future but to help new investors enter this market without the risks that have so far been a given for anyone wishing to trade in and benefit from involvement with cryptocurrencies.
Quantstamp recently audited Bancacy’s smart contracts aimed at solving outstanding challenges of illiquidity and volatility in crypto trading markets. Bancacy passed Phase 1 of the audit for smart contracts that are to go live on September 7. Phase 2 will go live in the near future, after rigorous testing of Bacancy’s smart contracts by Quantstamp before a formal rollout of the system.
To understand the effects of smart contract security breaches, consider the following: In 2016, an attack that became known as the DAO attack (and led to the creation of Ether Classic) was due to a smart contract vulnerability. The price tag placed on this vulnerability was a whopping $55 million, as discussed in depth here. Even smaller projects such as SpankChain are at risk; the project lost an estimated $40,000 due to a smart contract bug, as discussed here. Other hacks and attacks, some worth as much as $155 million, have become all too commonplace, as outlined here.
A brief history of more recent smart contract hacks can be found here, and as recently as June 2019, reports such as this discuss how as much as over 30,000 Ethereum smart contracts are vulnerable due to poor code.
Poor smart contract development, erratic price fluctuations, “pump-and-dump” schemes, and a lack of liquidity that makes it difficult for large enterprises to buy and sell crypto assets at predictable prices (a phenomenon that is known as slippage – when prices rise or fall sharply due to large buy or sell orders in markets that have limited liquidity and cannot meet demand or supply) – as well as other random events that have a large impact on prices, will all continue to push institutional investors away from entering the crypto market, and change will be long in the coming.
How will these challenges be addressed? A look at the profiles of Quantstamp and Bancancy can help answer this key question.
Quantstamp is a decentralized smart contract security auditing protocol that secures blockchain applications. It is a full-stack blockchain security company that has secured over $1 billion in audits and uses an innovative protocol that helps expedite smart contract verification, audits, consultations, and the development of security tools. With key expertise in application security and secure software development, Quantstamp’s solution is scalable and cost-effective; by providing security and auditing services for smart contracts in an automated fashion, Quantstamp can quickly and efficiently verify Solidity programs, thereby meeting the security and auditing needs of the smart contract industry.
As described in its whitepaper, Bancacy will replace centralized stable-coins (which are the current best-in-class solution to market volatility) with three proprietary smart contracts that communicate with each other to save users from volatility without involving any fiat currency. Smart contracts, by their very nature, are automated, and they execute when certain conditions are met. In times of market volatility or low liquidity, Bancancy’s asset solidification contract freezes assets until there is once again adequate liquidity in the market and prices stabilize. An oracle system – a system that connects the blockchain world to the real world and provides it with real-world data – will be used in conjunction with pre-approved smart contracts to ensure that asset solidification only occurs at the right time when market conditions meet the exact conditions that require solidification to occur.
Importance of Smart Contract Security
There is unprecedented importance on the need for security audits for blockchain projects and the smart contracts that power them. Also, as long as institutions avoid entering the crypto space, adoption and innovation in this space will be slow at best.
Having our smart contracts audited by Quantstamp gives Bancacy confidence that these contracts are safe, secure, reliable, and tested in real-world implementations where real people and real funds are in play. Once we are able to secure user funds from unexpected losses and massive price swings, we will see the beginning of a new era of crypto trade which combines the benefits of traditional, centralized systems with the benefits of automated and decentralized smart contracts that power the cryptocurrency space.
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Last modified (UTC): September 6, 2019 11:00 PM