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DeFi and Credit Risk
Certora raised $36 million in a Series B financing headed by Jump Crypto to fund development and the porting of its flaw-detection technology to new blockchains.
According to a draft blog post shared to CoinDesk, other investors in the round included Tiger Global, Galaxy Digital, Electric Capital, ACapital, Framework Ventures, CoinFund, Lemniscap, Coinbase, and VMware.
This year, blockchain security breaches have made headlines, with some resulting in nine-figure financial losses. Wormhole, a blockchain bridge, received $326 million, and Ronin Network, the infrastructure underlying the popular play-to-earn game Axie Infinity, received $625 million.
Certora was created to assist developers in detecting and preventing security flaws in their code before it is deployed. Prover is a tool developed by the corporation to supplement human audits and bug bounties. Certora claims to be protecting $50 billion in decentralized finance (DeFi) assets at the moment. The software detects and displays any rule infractions, or formally demonstrates that none exist.
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Shmuel "Mooly" Sagiv, a computer science professor at Tel Aviv University and a pioneer of formal verification, a field that uses complicated mathematics to establish or refute the validity of an algorithm, such as smart contracts on a liquidity protocol, is the company's CEO.
Certora currently only works with blockchains that are compatible with the Ethereum Virtual Machine (EVM). Extending support to Solana is the next priority, followed by spreading out further toward Polkadot.
In an interview with CoinDesk, Sagiv said, "What we want to do in the next year is to cover all of the blockchains."
How does it work?
In smart contracts, Certora detects violations of invariants, or rules that should not be breached. Aave, Compound, Balancer, and SushiSwap have all been found to have problems thanks to the firm's technologies. Before the code was deployed, the majority of the bugs were detected and fixed.
Certora, for example, protected SushiSwap's Trident liquidity pool contract from a serious flaw. Users fund the Trident pool with their own money, then earn fees for lending and trading. Fees are calculated in proportion to their share of total liquidity.
Because someone is providing the liquidity, there must be a technical rule that states that as long as there are pool funds, user shares must exist. If that rule is broken, the pool's shares are useless, or the monies are there but can't be claimed by the users.
The Certora Prover discovered a rule violation in the case of Trident, which might have allowed an attacker to drain the pool's funds. Before the code was deployed, the issue was found and rectified.
In a statement, Jump Crypto partner and investments head Saurabh Sharma stated, "Powered by world-class specialists, Certora employs formal verification to employ a suite of scalable and robust products that offer significantly higher reusability and granular testing."
