We have seen countless Decentralized Exchanges, Lending Protocols, and NFT marketplaces being built on Cardano, and many look fantastic. But with Cardano, we don’t just want more of the same, we also need something original. Something that is the first of its kind and reinvents industries like when DEXs first hit Ethereum. The Cardano community has spoken and a brand new, innovative project has been awarded funding through Cardano’s Project Catalyst Fund 5.
Project Catalyst allows the community to self-determine priorities for growth and lets participants deploy funding to proposals which tackle challenges and capitalize on opportunities within the Cardano ecosystem. It is broken up into different categories which are allocated a predetermined amount of funding for the proposals submitted each round. The category that Smart Contract Audit Token (SCAT DAO) received funding for was “Scale-Up Cardano’s DeFi Ecosystem.”
As stated in the projects proposal, “with an industry as young and technical as blockchain, mass adoption of decentralized applications will move sluggishly until a sufficient amount of trust has been generated. This can be done slowly as people use them cautiously and wait to see if any errors occur, or these applications can be independently audited using a consistent set of standards and provide a rating or certification on the code, assessment of the projects team, and recommendation of its legitimacy. By creating this environment of trust, the DeFi ecosystem on Cardano will grow faster and attract a wider range of people, which truly fits the category of Scale-Up Cardano’s DeFi Ecosystem.”
Audits are meant to establish trust for investors and dapp users, but the current system has an enormous flaw that previously could not be overcome without blockchain technology and DAO organization. That is the inherent conflict of interest that comes from a Development Team hiring an audit firm and paying them to provide an opinion. Auditors are expected to be completely independent and objective, but how can you be when you are auditing your employer? In the article, “The Impossibility of Auditor Independence,” Bazerman, Loewenstein, and Kimberly P. Morgan state, “Despite the auditors’ best efforts to place the external users’ interests above the client’s and to maintain objectivity, they may be unable to overcome cognitive or psychological biases that make them arrive at marginal decisions in the client’s favor.” This means that even the most respectable auditors who would never consciously overlook something are not immune from subconsciously overlooking potential issues that could upset their client. This is without even considering the possibility of a devious Dev Team selecting a disreputable audit company that can be paid to certify a project as safe to use when it is not.
The Cardano community recognized this as a serious problem and the message resonated strongly enough to secure sufficient votes to award funding. Other notable projects funded through that category are Liqwid Finance and ErgoDex which are currently expected to be released in October. With Catalyst funding comes a commitment to the Cardano community to deliver on promises and build something that will truly benefit the ecosystem. Many eyes will be on Smart Contract Audit Token as they progress over the months and change the way we think about audit professional services. Learn more through their website at SCATDAO.com