Blockchain security startup Certik has completed a Series B round of funding at $37 million, bringing total investment in the company to $48 million. Coatue and Shunwei Capital led the round with participation from Coinbase Ventures. Previous investors include Binance and Yale University.
The company specializes in auditing blockchain smart contract code to correct security vulnerabilities.
According to DeFi Pulse, the Decentralized Finance Leaderboard, DeFI smart contracts on public blockchain account for over $56 billion in digital assets. Anyone can view these smart contracts. Therefore vulnerabilities can be exploited by hackers.
For example, users of the Parity digital wallet lost over $169 million, or 513774 ETH in 2017 due to a flaw in its code that ended up freezing wallet balances. Parity itself was the largest victim. It is estimated that $285 million has been lost in DeFi projects since 2019 due to hacking, and a survey published in August of 2019 highlighted the wide array of potential vulnerabilities in smart contracts.
As such, it is important to have services like Certik’s to regularly review and audit DeFi projects to protect them against potential hacking opportunities.
Certik was founded in 2018 by professors at Yale University and Columbia. The solution uses AI technology to monitor blockchain protocols and smart contracts. Smart contract audits involve both automated checks and manual reviews. The startup has worked with over 600 clients in the last year, including Aave, Polygon, Binance Smart Chain, and Chiliz. Certik claims the projects it audits secure $70 billion of assets combined.
In addition to code auditing, Certik supports a platform called Skynet that clusters data regarding DeFi projects to give insight into the applications providing security scores.
“The power of blockchain boils down to the power of the people,” said CertiK co-founder Professor Ronghui Gu. “We’re proud to advance transparency in the space by providing the tools and resources including our official audit reports so the community can make sense of vital security information.”
The funding will be used to expand the team and develop new products and services regarding blockchain security.
Another initiative aiming to combat hacking in blockchain and DeFi is the Ethereum Trust Alliance, which is working to create a security rating system for smart contracts.
A loosely related sector is blockchain forensic solutions that work to prevent money laundering and fraud on public blockchains. TRM Labs recently raised $14 million in funding by PayPal, Elliptic is running a pilot with Santander, and Chainalysis raised $100 million at a $4.2 billion valuation.