Smart Contract Audit Token: building more trust between Cardano and its Users
Cole Bartlett | Dec 6, 2022
Supported by: Eric Helms (Founder of SCAT DAO)
What is Smart Contract Audit Token DAO?
Smart Contract Audit Token is a Decentralized Autonomous Organization (SCAT DAO) working to bring truly independent and conflict-of-interest-free audits and research to Cardano. They are building critical infrastructure such as free access to audit services by creating a new audit paradigm that reinvents the way audits are selected, performed, and financed.
SCAT DAO audits are self financed by the organization to avoid the conflict of interest that comes from a dev team hiring and paying their own audits. This has an added benefit of helping lower the barrier to entering the blockchain space by providing developers a free resource to review their code. They are currently developing the audit platform allowing Cardano community projects to obtain a cost and conflict free audit on their project.
The Smart Contract Audit Token services will help the Cardano community and builders in the ecosystem get access to critical pieces of infrastructure to improve the overall success of their projects. Raising the bar on smart contract complexity and influencing overall better Dapps to be built on Cardano.
This infrastructure provides:
(1) increase competition which improves quality and lowers the price
(2) increase innovation which brings cool new products to market
(3) ultimately expedites blockchain adoption for the masses.
Thoughts on the Audit Space
“We are big believers in auditor independence but would also like to highlight another aspect of why we are trying to transform the current audit system – the fact that not being rich should not prevent anyone from obtaining a smart contract audit.
With basic audits costing 5K to 10K USD and complex audits as much as 100K USD, this creates a system where only extremely well-funded or independently wealthy dev teams can afford an audit for their smart contracts.
This high cost of audit as a barrier to entry is one of the reasons we have created the Smart Contract Audit Token.” – Eric Helms
At SCAT DAO no one ever has to pay for their audit services, because the audits are funded by their Decentralized Autonomous Organization’s treasury.
“If Cardano or blockchain at large is truly meant to be for everyone, then we need to have certain critical infrastructure in place that allows anyone to build their vision, regardless of how wealthy or well-funded they are.” – Eric Helms
SCAT DAO Team
The SCAT DAO was started by Eric Helms and he is the founder of the project.
“I created the concept and have been developing the idea and building a community around it since we started.” – Eric Helms
Why start the Smart Contract Audit Token?
“I am a Certified Public Accounts (CPA) who has been working in corporate audit for the last decade. Starting off with the Big 4 and then working in internal audit for Fortune 500 companies.
I have worked for some terrific companies and with some extremely talented colleagues, but it has always bothered me the way that audits are structured. From the time that we learn about audit methodology in school to when we are trained on-site, the concept of auditor independence is always stressed extremely hard. But I have always felt that we were not truly independent and that our employer had a large amount of influence in our work.
Once web 3 became prominent and we could build a new system that uses a community approach with self funding, I could not pass up the opportunity to try and implement something like this.” – Eric Helms
Additional Members of SCAT DAO
Juan C. Rey – Full Stack Developer / Plutus Pioneer
Oliver Ross – Content Creation
Jimmy Huang – Head of Community
The Smart Contract Audit Token was brought to life through Cardano’s decentralized innovation fund Project Catalyst. Project Catalyst is the world’s largest decentralized innovation fund helping build and grow projects from the idea stage to the product stage. Project Catalyst was designed to allow project proposers to get support and feedback on ideas to help bring strong and influential projects to the Cardano community.
The first round SCAT DAO participated in was Catalyst Fund 5 which is a part of what helped kickstarted the project as a whole.
Eric the Founder notes:
“I will also note that without Project Catalyst I never would have tried to pursue this, so very grateful to everyone who voted for us and supported us through that.”
“I’ve been a fan of Cardano for a while. Like many of us, I got interested in the space through Ethereum because it seemed like it had unlimited possibilities of what you could build with it.
But after actually using the blockchain, it was apparent that this was not going to be the solution. Paying over a hundred dollars for a swap is not going to bring mass adoption so I started looking through the alternatives and Cardano checked all the boxes.
Then after spending time interacting with the Cardano community, it was apparent that this is where I would want to be. Have not looked back since.” – Eric Helms
Key challenges with the blockchain landscape that SCAT DAO will help change
When looking at the blockchain ecosystem as a whole there are a lot of key challenges that can cause confusion and overall make it hard to enter the space. SCAT DAO sees its solution as a way to minimize some of these issues while bringing more trust to consumers using products and services daily from the blockchain industry.
“So far I feel that one of our key challenges has been getting people to care about this type of work.
What we are doing is a bit of a new concept and many people in crypto have associated investing in projects with gambling. We are trying to change that perception because most have a finite amount of capital to invest and so doing the proper research to make the best choices is important.” – Eric Helms
How SCAT DAO connects to Sustainability and the Sustainable Development Goals
The United Nations’ 17 Sustainable Development Goals (SDGs) are an urgent call for action by all countries. This enables countries to create global partnerships that work towards achieving these goals. The goal is to achieve the SDGs, which are built upon decades of work by countries and the UN.
Blockchain technology is a key technology for the SDGs because it enables stakeholders globally to have the ability to track, record, and share data that is immutable, timestamped, and verifiable. With SCAT DAO they are enabling transparency through the Smart Contract Auditing service they are providing which will help enable more trust between Dapp creators and their consumers.
SCAT DAO is directly connected to SDGs:
SDG4 Quality Education – Through their free audit service SCAT DAO will be providing very important free educational data to the community which will help community members find more trust in the building of the projects in the Cardano ecosystem.
SDG 9 Industry Innovations and Infrastructure – They are helping with industry innovation and infrastructure by minimizing the barriers to entering the blockchain development space, which will help more innovation flourish within the Cardano ecosystem.
They believe that “If Cardano or blockchain at large is truly meant to be for everyone, then we need to have certain critical infrastructure in place that allows anyone to build their vision, regardless of how wealthy or well-funded they are.”
This helps show their strong interest in helping support new industry innovation and infrastructure by providing smart contract audits to project teams for free. SCAT DAO also is connected to SDG 10 Reducing Inequalities. This is seen through their direct impact of the service they are providing by minimizing the barriers to entering the Cardano community by receiving free audit services to give true transparency to customers.
Additional SCAT DAO services
The Smart Contract Audit Token team has been developing the proposed audit platform which takes time “as does any dapp running on the blockchain. During the development phase, SCAT DAO still wanted to start providing assurance over smart contracts starting to populate the Cardano ecosystem. This is why they have created the ‘Bug Program’, and the Do Your Own Research (DYOR) Tool.
The SCAT DAO bug program is open to anyone and there is no selection criteria to participate. In simple terms, it’s a service that allows community members to review code and receive compensation for the findings. The “Bug Exterminator” feature that is present in the current bug bounty program will be used in the official audit platform. Like, a decentralized treasury and token voting features.
To join the Bug Exterminator program, you can fill out a registration form from their website and set up an account. In this role they allow community members to be anonymous and your identity will be simply attached to the reports with a username.
When calculating the total value of audit bounties that can be provided they use funds from the SCAT DAO treasury and then use the equation (total treasury funds – treasury reserves) / bounty amount) to calculate the number of audits they can perform.
The projects that are selected for bounties will be chosen by the holders of the AUDIT token. These can be members of the community who are interested in specific projects or also a dev team who may want to have their smart contract to be audited. Teams can also provide another incentive to increase the feasibility of their project being reviewed and looked over like an airdrop to AUDIT token holders. Each audit token equals 1 vote like Project Catalyst, and there will be a voting phase before projects are selected.
Bug Review process:
During the Bug review process, the Bug Exterminators will have a window to review the code and submit a report for anything that they find. During the review stages, the exterminators are required to submit 1 report per bug, and cannot include multiple bugs in the same report.
Bug Exterminators are allowed and encouraged to work as a team. By simply registering the team during the registration process. Just like they would as an individual.
There will be a standard template that they can use when submitting the form to ensure that they have provided all the necessary information.
The Bug Exterminator will also need to include clear instructions so that a reviewer can easily understand and replicate the issue that was found, and each needs to ‘self-designate a risk rating for each submitted form. For risk rating, they will be using the OWASP risk rating criteria.
When looking at the payouts and operation cost of the Audit the payouts will be on a first come first serve basis. So when the same bug is submitted by multiple people, whoever submitted first will receive the payment. The payment amounts are already pre-determined for each risk rating and they will receive a payment of ADA as well as AUDIT tokens to give them a voice in the SCAT DAO.
Learn more about the Bug Program: https://www.scatdao.com/bug-exterminator-program
The Do Your Own Research (DYOR) Tool is an online tool with 27 different evaluation points to help anyone do the proper research and evaluation of projects building on Cardano. The tool helps explain why each point matters and why you are researching it in the first place.
The DYOR Tool also provides clearly written steps a community member can follow and properly perform an evaluation. Once finished the tool calculates a score based on the information you have collected and gives a standardized basis to compare different projects to each other.
The Tool will generate a shareable report so that anyone in the Cardano community can also benefit from the research performed on that specific report.
By providing this tool SCAT DAO is enabling community members to be hyper-aware of the developments within a project and become better investors when looking to support a project or organization through token allocation or purchasing an NFT.
Check out the DYOR Tool here: https://dyortool.io
Also each DYOR Report is minted on-chain as an NFT also found here: https://www.jpg.store/collection/dyornft-scatdao
How to use the DYOR Tool: https://www.youtube.com/watch?v=qj8Lkqf-sRA
News and how to get involved
The SCAT DAO team is currently running an ISPO which will go towards their DAOs treasury and be used to generate funding for their audits.
“We would love to have you join our community. If you like to research tokens or NFTs, we run regular contests where you win tokens for doing research. We also have an open bounty where you can earn tokens for doing quality research reports we can add to our library.
Please consider joining our discord if you would like to get involved.”