DeFi is the only industry where someone might say, “it’s not a bug, it’s a feature” in earnest. Platform after platform gets deployed and we see hack after hack, totaling well into the billions. It’s as if getting hacked is some sort of rite of passage and not a massive weakness of the entire ecosystem. Certik was widely recognized as a gold standard auditor and to date, Lien, Cover, Bzrx, Paid, Yield, Akro all contracted with this relative standard-bearer and got subsequently hacked or exploited. This is not a knock on Certik or an expose on auditors, rather, it is to point out the degree of vulnerability that locked funds, on average, are exposed to.
For DeFi to prevail, we have to set a considerably higher benchmark, which is still considered pro forma in the world of programming. Test, test, test and audit is the industry standard for any commercial grade piece of software. In DeFi, where some forty billion is locked, unaudited is a disclaimer and to most, not an issue. The “build fast break things” school of thought should only apply to platforms where the worst thing that could happen is your selfies could be compromised and publicly exposed. “In the wild” experimentation does not mix with the words “investment” and “funds.”
Bonded Finance is committed to releasing the very best quality product and will not compromise where security is concerned. A product where retail investors and institutions alike can confidently deploy their capital, productively and securely, with little threat of loss.
In January, after testing we found some undesirable results that prevented our software from functioning the way we hoped. This initial code was to serve as the base for the rest of the products to be released on the Bonded network. Each product caters to a different audience and each is equally valuable to the total performance of the network. Following this initial audit, in February, we were able to confirm some systemic issues. Again, we added additional functionality as well as more partners so there was more on the line. The logic needed to be flawless. It was then when we properly assessed and determined the development plan.
The primary issue raised in our audit was regarding the excess consumption of gas. Bonded Finance is an incentive heavy network with the potential for transaction and request volumes to be uniquely intensive, however, we must keep gas fees to a minimum. The Ethereum network was decidedly less expensive when we began but anticipated this to some degree. The proposed safeguards were inadequate and personnel was subsequently dismissed. Our index baskets have to be equipped to juggle and rebalance hundreds of assets each with their own unique LVR, volatility, risk parameter and interest requisite to ensure the protection of lender’s capital. It is these unique characteristics that make Bonded Finance an important and powerful DeFi platform. Of course there will be obstacles and as we moved through audits we were able to determine what they were and how to best move forward.
To effectively move forward we needed to rectify our vulnerabilities both technical and human. As Paul Mak highlighted to the community, some people lost their jobs over this. No one was more frustrated than we were and we decided that we could no longer work with the developers who led us to this bottleneck. We spent a month in recruitment, training, researching and assessing. Finally we were able to find a team to supplement our lost development resources as well augment our initiatives. We are pleased to confirm that CyberUnit.Tech has been instrumental in supplementing our core team in order to expedite product delivery.
Since onboarding Cyber.Unit.Tech, we have collectively been able to expedite our primary weapon, the altcoin index, and also have our USB algorithmic dollar already in audit. It has taken time but we are very near launching our cardinal lending asset which will coincide with our new rewards mechanism. Moving forward we will keep the community up-to-date with monthly progress reports.
Our team has been considerably improved upon as has our product. This coupled with our continued business development, has us well on track to see our objectives through.
We hope this adequately covers the when audit question.