If you’re an Ethereum project looking to conduct audits before the end of 2020, it’s probably too late in the game.
The accounting firms that CoinDesk spoke to are overflowing with decentralized finance (DeFi) projects. The month-long lag is due to a sharp decline in the $ 11 billion DeFi market, with most tokens down 19% in the past 30 days, according to Messari.
Auditing firm OpenZeppelin, which has overseen exams for DeFi staples like Compound and Augur, said it sees “an overwhelming demand for exams” and is booking customers “well into the first quarter of 2021”.
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“We see a lot of requests for governance token clones of varying quality,” said David Steinrueck, Marketing Director of OpenZeppelin, to CoinDesk in an email.
Juliano Martinez, technical editor at the accounting firm Quantstamp, told CoinDesk in a telegram message that the “high volume” of applicants had led his company to “reject many projects”.
The separation between audited and non-audited projects was noticeable in DeFi’s boom months – often referred to as “DeFi summer” – as code errors in some projects led to contracts being exploited by hackers. Indeed, some projects such as the “monetary experiment” Yam.Finance have shown openly to be unaudited.
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A three month lead time for DeFi audits
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Dan Guido, Trail of Bits co-founder and CEO, told CoinDesk in an email that the company has a typical lead time of three months before a new project can be considered.
According to Guido, the fourth quarter has always been a busy quarter for DeFi accounting firms as “institutional clients try to spend their remaining money before the end of the year”.
Trail of Bits also audited three Ethereum 2.0 customers, including Nimbys, Prysm, and Lighthouse, before the project is expected to kick off in late fall.
However, the lack of new projects isn’t why DeFi is entering a bear market.
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Independent analyst and former quantitative trader at Tower Research, Qiao Wang, told CoinDesk in a private message that the “market is exhausted because it has been overheated,” and that the sharp drop in DeFi token prices is “pretty unrelated to new high quality projects, of which there are many. “
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