The Launch of CertiKShield

Originally published
November 24, 2020

Have you ever seen $4,000,000,000 dollars?

Even If you’re fortunate enough to be earning $1,000,000 per year, it would still take you 4,000 years to reach this amount.

This is also the equivalent amount of total crypto assets stolen by hackers in 2019 alone.

As cryptocurrency adoption grows so does the need for a more secure blockchain ecosystem. Here at CertiK, we’re tackling this threat head on.

The Launch of CertiKShield

We’re thrilled to announce the launch of CertiKShield.

As of 11/24 participants and projects, including DeFi giant Kava, will enjoy greater peace of mind and an additional layer of security when it comes to their crypto assets.

CertikShield is a decentralized, membership-based plan to provide reimbursements for lost or stolen crypto assets on any blockchain network.

CertiKShield Pools are intended to serve as discretionary community funds used to protect its members, who may be holding $ETH, $BNB, $USDT, or any other crypto asset. In an event of irretrievable loss, Pool Members may submit detailed Claim Proposals, opening a voting period for the CTK network to determine whether reimbursement is appropriate. This decentralized, on-chain voting process allows CertiK Chain users to actively participate in determining reasonable coverage scenarios, creating a dynamic and fully flexible coverage model.

Ultimately, joining a CertiKShield pool can serve to significantly mitigate the impact of a blockchain security event which results in your crypto assets becoming lost or stolen.

The benefits of CertiKShield don’t stop with pool participants. Participants on the CertiK Chain can opt to provide collateral to the CertiKShield pool in return for compounding CTK rewards.

How Does it Work?

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There are two parts of the CertiKShield system: 1) members who fill the pool with CTK as collateral to be used to reimburse approved Claim Proposals, and 2) members who seek to protect their crypto assets by reserving a part of the CertiKShield Pool.

Collateral Providers

Let’s start with the members who are filling the Pool. Just like liquidity providers in DeFi, these members are staking their CTK. In addition to normal staking rewards, these members also gain a portion of the fees paid by the other members who reserve a portion of the Pool to protect their crypto assets. These members who are filling the Pool must recognize the risks associated with being liquidity providers: their staked CTK may be used to pay out approved claims of reimbursement. High risk, high reward.

You can view the participation of collateral providers in the CertiKShield ecosystem similar to a more conventional DeFi project. Users are, essentially, staking their CTK in order to earn compounding rewards. CTK provided as collateral will serve to provide a tangible difference to the security of blockchain as a whole.

Shield Participants

Now let’s talk about the members who seek to protect their crypto assets.CertiKShield Pool is intended to protect the users of a specific crypto asset (like BNB, for instance). If you’re a BNB holder, it may be smart to become a member of the CertiKShielk Pool with BNB terms, where you can reserve a part of the funds to request a reimbursement if your BNB gets lost or stolen. You’ll pay a fee, and as mentioned, this will go directly into the members who have pooled their own CTK as liquidity providers.

Members seeking reimbursement must submit Claim Proposals, which are voted by the decentralized group of CertiKShield members to approve or reject the claim. All submissions require fees, protecting the system against illegitimate claims and gaming of the system.

It’s worth noting that not all cases of lost/inaccessible crypto assets are eligible to be claimed against via CertiKShield. Losses from social engineering or misplaced private keys are not eligible because the proof of a legitimate loss, as opposed to a potentially coordinated “loss,” is not absolute.

For projects looking to secure their crypto assets, for both themselves and their community, CertiK provides more than just coverage through CertiKShield, we provide an ecosystem health check which is synergistic with CertiKShield coverage. Through the utilization of security audits, our innovative QuickScan technology, and the security oracle, blockchain-based projects can advance to the highest possible tier of security.

CertiKShield in Action

Let’s take a look at an example scenario of CertiKShield in action:

Project X (a fictional blockchain project for the purpose of this scenario) is seeking to secure both themselves and their community from unforeseeable blockchain security events. To do so, they pursue a CertiKShield membership for their native yield farming token, $PJX.

The protocol undermining Project X is later discovered to suffer from a severe security flaw and, consequently, the Project X team find themselves a victim of a hack which results in $50,000 in $PJX being stolen, in addition to a significant amount of $PJX belonging to their community and those who have held their assets in the protocol.

Thankfully, the Project X team have protected both themselves, and enabled protection for their community, through their CertiKShield membership. The team, and any of their community members which have joined the CertiKShield pool with the $PJX terms, can submit a claim proposal. Collateral providers, who have been earning CTK passively for providing collateral throughout CertiKShield, can cast their vote after they’ve assessed the claim proposal.

The Project X team, and any community member wise enough to have protected themselves with CertiKShield, will find that the value of their missing funds has been returned in $CTK shortly after their claim proposal has been accepted.

Empowering Trust in Blockchain

CertiKShield is another tool in our arsenal which enables us to achieve our goal; provable trust for all across all facets of blockchain.

Here at the CertiK Foundation, we believe that the cryptosphere is powered by innovation, and that same innovative mindset is what has lead to the development, and launch, of CertiKShield; a truly novel solution to a problem birthed when Satoshi Nakomoto put pen to paper, or rather finger to keyboard, back in 2008.

CertiKShield, as a fully decentralized reimbursement system, provides significant flexibility and risk-reward sharing for its members whether you’re joining CertiKShield in order to secure your crypto assets, or you’re providing collateral to earn compounding CTK rewards.

CertiKShield is being utilized by projects and HODLers alike in order to deliver an additional layer of security throughout every blockchain and to provide peace of mind when it comes to securing the value of their crypto assets.

We’d like to invite you to learn more about CertiKShield with our definitive guide here.

If you just can’t wait to get started and are looking to secure your blockchain project, or personal crypto assets, right away, then head on over to our website, hit ‘Join CertiKShield’, and fill out the form. Our team will be in touch promptly.

As part of our commitment to the CTK, the CertiK Chain, and the wider CertiK ecosystem, we’re offering a 20% reduction in the cost of CertiKShield memberships when paying in $CTK.