If you're an Ethereum project looking to get audits done before the close of 2020, it's probably too late in the game.
Audit firm OpenZeppelin, which has overseen audits on DeFi staples such as Compound and Augur, said it is “seeing an overwhelming demand for audits” and is booking clients “well out into Q1 2021.”
“We're seeing a lot of requests for governance token clones of varying quality,” OpenZeppelin Marketing Lead David Steinrueck told CoinDesk in an email.
Juliano Martinez, technical writer at audit firm Quantstamp, told CoinDesk in a Telegram message that the “high volume” of applicants has led to his company “rejecting lots of projects.”
The separation between audited projects and non-audited projects became palpable over DeFi’s boom months – often referred to as “DeFi Summer” – as code flaws in some projects led to contracts being exploited by hackers. In fact, some projects such as “monetary experiment” Yam.Finance openly flaunted being unaudited.
A three-month 'lead time' for DeFi audits
Trail of Bits co-founder and CEO Dan Guido, on the other hand, told CoinDesk in an email the firm is running a typical three-month “lead time” before a new project can be audited.
Guido said Q4 has always been a busy quarter for DeFi audit firms as “institutional clients try to spend their remaining cash before the end of the year.”
Trail of Bits also conducted audits on three Ethereum 2.0 clients including Nimbys, Prysm and Lighthouse ahead of that project’s presumed late-autumn launch.
A lack of new projects rolling out is not the reason why DeFi is entering a bear market, however.
Independent analyst and former quantitative trader at Tower Research Qiao Wang told CoinDesk in a private message the “market is exhausted because it was overheated” from overplayed retail buyers and that the sharp fall in DeFi token prices is “pretty independent from new high-quality projects, of which there are many.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.