- CertiK was founded in December 2017 by acclaimed computer science professors. The company specializes in developing cutting-edge security solutions for blockchains, dApps and software applications. CertiK has serviced more than 100 clients and secured over $18B worth of digital assets with high-quality auditing and consulting services, ranging from stablecoins such as Binance’s BGBP and Paxos Gold to decentralized oracles such as Band Protocol and Tellor and well-established DeFi protocols including Aave and Ampleforth.
- The CertiK Foundation is a nonprofit, research-driven organization with the mission to empower people to trust the blockchain technology. The foundation launched CertiK Chain in late 2019.
- CertiK Chain is a cross-chain protocol designed to ensure the security and reliability of blockchain infrastructure and decentralized applications built on top of it. CertiK Chain is able to achieve this with native in-chain features including Security Oracle, CertiKShield Reimbursement Pool, a secure programming language – DeepSEA, and a hacker-resistant OS kernel – CertiKOS (Figure 1).
- The project launched on October 27 2020 on the Binance Launchpad. According to Binance Research, the project raised 39.4M USD from two rounds of private token sales, where 38.00% of the CTK total token supply has been sold at 0.77 USD/CTK and 1.90 USD/CTK.
Main Features of CertiK
For economics and performance, CertiK Chain uses a Delegated Proof-of-Stake (DPoS) consensus protocol. For accessibility, CertiK Chain is built with the inter-chain friendly Cosmos framework and is fully compatible with the Ethereum Virtual Machine. The CertiK Chain leverages and provides the safest infrastructure for the blockchain ecosystem, including the CertiK Virtual Machine, CertiKOS, and DeepSEA programming language. A blockchain can fulfill its promise of a fairer, safer, and more transparent system only with verified layers.
– CertiK Security Oracle
CertiK Security Oracle aims to enable users to assess the risk of a DeFi protocol/smart contract in real-time before interacting with it. The oracle retrieves a set of security scores from a decentralized network of security operators which assess the reliability and security of the source code, and compete to earn $CTK (Figure 2). Security scores are displayed on a scale of 1 to 100 enabling users to assess smart contract risk at a glance.
The CertiK Security Oracle makes audit reports available on-chain and decentralizes security intelligence from a handful of security auditors to the entire blockchain community to be accessible on-chain upon demand.
– CertiKShield Pool
This is a decentralized pool of CTK that is used to reimburse lost, stolen or inaccessible crypto assets from any blockchain. As a member, if your funds have been stolen, you can submit a detailed request for reimbursement. The rest of the members vote on your request, and if it is deemed to be legitimate and appropriate for reimbursement, you’ll get paid back.
CertiKShield Pools consist of Collateral Providers and Shield Purchasers. Collateral Providers receive staking rewards for staking CTK in the CertiKShield Pool, while also collecting a portion of the fees paid by Shield Purchasers, as depicted in Figure 3. The cost of reserving funds from the CertiKShield Pool for personal reimbursement of lost assets will be directly tied to the CertiK Security Oracle score, with lower scores (which represent more risk) requiring higher fees for protection.
– CertiK Virtual Machine (CVM) is built to support a security-first blockchain and enable security intelligence to become an on-chain, expressible value. The CVM is unprecedented in its ability to empower users to access, check, and dynamically establish blockchain and smart contract security. It is fully compatible with the Ethereum Virtual Machine (EVM).
– DeepSEA is a security-first programming language and a compiler toolbox that is fully compatible with CertiK Chain’s virtual machine, along with Ethereum WebAssembly and Ant Financial’s AntChain. The DeepSEA toolchain was developed by the CertiK team with support from the Ethereum Foundation, Columbia-IBM, Yale University and the Qtum Foundation.
– CertiKOS is an operating system kernel originally developed at Yale University, receiving international acclaim as the world’s first “hacker-resistant” OS kernel. It was the subject of five papers published at top computer science conferences from 2015-2020. CertiKOS is the bedrock for the security infrastructure of CertiK Chain, and plays a pivotal role in running CertiK Chain nodes and the CertiK Security Oracle.
– CertiK QuickScan can be used to secure the Binance Smart Chain smart contracts; this is a lightweight, yet powerful scanning system that can complete a smart contract auditing process within 15 minutes. The CertiK QuickScan uses automated scanning technologies to analyze a wide range of known security vulnerabilities at scale. Once finished, the scanned smart contract will receive a score broadcasted through the Security Oracle network via CertiK-maintained oracle operators.
CertiK Foundation Ecosystem
- Development partners include Ethereum Foundation, Columbia-IBM and the Qtum Foundation
- Leading exchanges including Binance, Huobi, Liquid and Coinone have chosen to partner with CertiK’s expertise to audit blockchain projects before allowing them to list on their exchanges
- Research partners include Yale University and Columbia University
A more exhaustive list of CertiK’s notable clients and partners includes Hyundai, Ant Financial, yearn.finance, Ampleforth, AAVE, Band Protocol, Binance Coin, Bitcoin.com, Crypto.com, Kava, Terra, ThorChain, ICON, Matic, Swipe, Reserve, Paxos, TrueUSD, Universal Protocol and hundreds of other projects.
CTK Token Distribution
CTK token specifications are as follows:
- Initial valuation / market cap (MC): $27M
- Total supply (TS): 100,183,153 CTK
- Initial circulating supply (CS): 23,796,787 CTK (23.75% of total supply)
- Detailed token distribution as illustrated in Figure 5
CTK is the native utility token of the CertiK platform. The token utility includes:
- Gas consumption for smart contract operations
- Shield purchases for insurance against hacks, theft and code malfunction
- Payments for real-time Security Oracle audit requests
- Staking for network consensus and hosting validator nodes
- Rewards for participating in the Security Oracle network and providing real-time security analysis
- Collateral and reimbursements for providing collateral to the CertiKShield pool
- Community voting for decentralized network governance
CTK token has been allocated to two Private Sale rounds. The first Private Sale round sold 29M CTK at 0.77 USD/CTK raising USD $22.33M, while the second Private Sale round sold 9M CTK at 1.90 USD/CTK raising USD $17.1M.
Within the blockchain industry’s security sector, CertiK, Quantstamp and OpenZeppelin are considered the three most prominent companies with an excellent track record of auditing top-notch clients worldwide. Among the three projects, OpenZeppelin was founded the earliest (2015 vs 2017), focusing on an open-source library besides security auditing. However, it was left behind in the smart contract security race when CertiK pioneered its automatic auditing tool, and Quantstamp followed shortly. Moreover, only CertiK and Quantstamp have their own token. Thus, in this report, we cover a comparison between CertiK and Quantstamp.
As demonstrated in Figure 6, we observe that CertiK outperforms Quantstamp with better metrics in audited assets despite a smaller client pool. CertiK’s excellent performance also resulted in higher stakeholders’ confidence, vividly depicted by the higher funding and market cap.
Upcoming News and Development Progress
CertiK chain mainnet has been launched on Oct 24 2020. The team is working to launch CertiKShield Pools with existing clients as well as integrate with major protocols to provide on-chain security through the Security Oracle mechanism. Furthermore, CertiK team has released CertiKShield yield farming to reward collateral providers with CTK. We expect the team to continue the momentum and add more projects to CertiK’s portfolio. Besides, CertiK will focus on community building in China, South Korea, North America and Europe.
CTK token is fully released for 2 out of 7 allocations i.e. Private Sale 2 and CertiKShield Pool. The rest will be distributed gradually until August 2023. Details for the CTK release schedule are illustrated in Figure 7.
Reasons to be Bullish
- Centre of expertise: CertiK Chain brings some of the world’s brightest minds in computer science to solve a painful issue in DeFi – security of unaudited contracts. In DeFi it has become increasingly popular for unaudited smart contracts to be released pseudo-anonymously and the community to interact with them in the hunt for lucrative financial rewards. These contracts often go unaudited because it has normally been seen as the responsibility of the contract developers to seek audits, but in many cases the developers seek not to. The CertiK Security Oracle decentralizes the responsibility of conducting security analysis and instead gives the power to the people to request security intelligence themselves.
- Emerging DeFi security risk: With over $1.4B of crypto stolen in the first 5 months of 2020 alone, a CertiKShield membership is a wise step in the right direction for individuals and projects involved in the DeFi space.
- Reputation and a supportive ecosystem: A highly active community with the growth campaign including regular technical updates and education sessions via blog posts, online and face-to-face product education sessions, and social media engagement
Factors to Watch
- Competitors: Various types of decentralized applications and networks are emerging at a rapid rate, and the industry is increasingly competitive. It is possible that alternative networks could be established that utilize the same or similar code and protocol underlying CTK and/or the CertiK Platform and attempt to re-create similar facilities. The CertiK Platform may have to compete with these alternative networks, which could negatively impact CTK and/or the CertiK Platform.
- Loss of talent: The development of the CertiK Platform greatly depends on the continued co-operation of the existing technical team and expert consultants, who are highly knowledgeable and experienced in their respective sectors. The loss of any member may adversely affect the CertiK Platform or its future development. Further, stability and cohesion within the team is critical to the overall development of the CertiK Platform. There is the possibility that conflict within the team and/or departure of core personnel may occur, thus negatively influencing the project in the future.
Note: This projection evaluation method considers both the CTK token price and the CTK circulating supply as variables. This is an accurate representation since both are subject to change over time.
- At the time of writing, the circulating supply (CS) is 23.8M CTK, and the market cap (MC) reaches $27M. The token’s initial price on Binance Launchpool was $0.77/CTK. At the time of writing, the token price had passed the $1.13 mark.
- CertiK is expected to carry on its market leader’s advantage by expanding its product suite and industry network. CTK CS will be around 50M CTK in August 2021, and CTK may reach the Top 100 ranking at CoinMarketCap.
- At full token release, the CS will be around 100.18 million CTK. CTK token price may potentially reach $5 per token, giving it a circulating market cap exceeding $500M.
Finally, Figure 8 presents the different possible scenarios determining the potential CTK market cap and the associated return on investment (ROI) in the future.
The CertiK’s Security Oracle and Shield Pool are necessary in the DeFi space. The Kyros research team expects CertiK to continue to grow as the leader in the smart contract audit niche. Furthermore, we are bullish on this project, and we believe that the crypto enthusiasts and investors alike will also be able to foresee its potential.
Taking into account CertiK’s favorable metrics versus comparable projects i.e. Quantstamp, we would be extremely surprised to see this token stay under $2 within the first half of 2021.
Due to the volatile nature of the crypto markets, short term price estimates are difficult to establish. We, however, expect to see the CTK token price soar to $2.8 – $4 in the mid-to-long term, giving it a circulating market cap in the vicinity of $330M.
Even higher token price milestones are feasible in the long term, our most bullish prediction envisaging CTK potentially reaching $4.5 – $5.5 in the future. Taking into account that CTK has the market leader advantage in the blockchain security industry, it will probably remain a force to be reckoned with.