Quantstamp is proud to announce that we have conducted a manual audit of the Interactive Initial Coin Offering (IICO) smart contract implementation by Modular Inc.

The IICO is a way to conduct token sales designed to improve fairness for contributors, and was detailed in a white paper written by Jason Teutsch and Vitalik Buterin, Truebit and Modular Inc. Modular Inc.’s implementation is meant to serve as a template for projects wishing to conduct a fairer, more transparent token sale using the IICO model.

Limitations of Traditional ICOs

Hard-capped ICOs:

A hard cap is a maximum amount of funds a project is willing to raise during an ICO. This helps potential contributors estimate the value of the tokens they are buying and thus the growth potential of their investments before they make a contribution.

A hard-capped ICO comes with the disadvantage of excluding potential contributors once the hard cap is reached. Popular ICOs using this model are often oversubscribed, which can lead to network congestion as contributors compete on gas fees to get in on the sale. Whitelists and personal contribution caps are used by some ICOs in an attempt get around these issues, but each of these approaches is less than ideal.

Uncapped ICOs:

In an uncapped ICO, there is no limit on the amount of funds raised, so anyone who wants to contribute has the opportunity to do so. In this model, contributors are only aware of the valuation (total raise) of a project after the tokensale has concluded.

Although anyone interested can participate in an uncapped ICO, participants have no idea of the value of the tokens they have bought, and thus no way to estimate the growth potential of their investment .

Interactive ICOs

Interactive ICOs aim to improve on these two models, allowing more people to participate, while still letting participants estimate the potential value of their contribution. This is done by giving potential participants the ability to retract their contributions if a project raises more funds than they are comfortable with.

Similar to an uncapped ICO, an IICO lets participants contribute as much as they want during the course of the sale, however they also have the ability to add a condition that their contribution is withdrawn if the IICO is estimated to raise more funds than the contributor may desire or expect.

This ability to set a personal project funding cap, as well as an initial period where contribution bids can be submitted or withdrawn, allows IICOs to provide a more fair and predictable process for participants.

Creating a Healthier Token Ecosystem

Quantstamp has audited Modular Inc.’s smart contract implementation of the IICO concept. Our audit has found no serious vulnerabilities, and we generally found the contracts to be well designed and written. We’ve also provided Modular with security recommendations for their consideration to improve safety for real world IICO deployments.

Here at Quantstamp, we take pride in enhancing the security of projects that were created with an aim to directly benefit the crypto community. By auditing the security of the IICO smart contracts, we hope to encourage more projects to use them to create fairer, more transparent token sales.

The

https://github.com/quantstamp/IICO_Review

Quantstamp Contributes to Ecosystem Fairness and Transparency by Auditing the IICO was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

Quantstamp is proud to announce that we are joining the Ethereum Community Fund alongside OmiseGo, Golem, Raiden, Cosmos, Global Brain, and more great projects. Vitalik Buterin is also an advisor of the Ethereum Community Fund.

The Ethereum Community Fund was founded in order to facilitate the mainstream adoption of Ethereum. The Ethereum Community Fund seeks to improve infrastructure and facilitate the creation of new innovative applications by issuing grants to developers and researchers.

Quantstamp joined the Ethereum Community Fund because we see Ethereum as a public good. Unlike other technologies, Ethereum has the potential to enhance the autonomy of end-users and increase the value for the end-user by removing intermediaries. Blockchain technology has already given people the ability to control their own money and, in the near future, other Ethereum projects are likely to improve society in other unforeseen ways.

During the early days of the internet in 1994, developers didn’t know that use cases like Twitter, Youtube or Wikipedia would eventually exist; however, those involved at the time knew that something big was on the horizon. We envision blockchain technology having an even greater impact on society than the internet.

Quantstamp is very optimistic about the future of blockchain technology, but in order for this public good to succeed, we need to invest in infrastructure. In 2017, ICOs raised 5.6 billion USD but very little of that money went into developing infrastructure such as developer tools, UX, privacy, researching the quantum computing threat and scalability.

Scalability in particular is critical to the success of Ethereum. Last year, Crytpokitties alone clogged the network for weeks. In 2018, more dapps are going live and Ethereum will struggle to achieve mainstream adoption if 2 or 3 successful dapps freeze the network.

This is why we are very excited to be a part of the Ethereum Community Fund. Quantstamp focuses on smart contract security because it is a necessary precursor to secure the mainstream adoption of smart contracts. Through the Ethereum Community Fund, we now have a new avenue in which to facilitate the success of blockchain technology. We are looking forward to working closely with our fellow industry leaders in order to find solutions that bring us closer to a decentralized future.

Quantstamp Joins Ethereum Community Fund was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

Quantstamp will audit Layer Protocol’s ICO and protocol smart contracts in the near future. Layer is a protocol that allows asset sharing companies to share user reputation information. This allows companies to more effectively incentivize their users to engage in positive behavior.

Proof-of-Caring participants will also qualify for Layer token airdrops. Details on these airdrops coming soon, but join the official Layer Protocol Telegram group for the latest updates.

Current Issues Facing the Sharing Economy

When users rent assets from companies like AirBnB, Spin and Zipcar, there is no guarantee that users will return these assets in good condition. When a user damages an asset (like a car or apartment), companies often pass on these costs to other users through higher fees. Users with excellent behavior are effectively subsidizing the bad behavior of others.

While asset sharing companies do have existing reputation systems, they currently do not have an easy and convenient way to share this information with each other. This barrier allows a user with a bad reputation on one platform to start with a fresh reputation on another platform. Conversely, users with an excellent reputation on one platform cannot benefit from that reputation on a different platform.

How PIN Protocol Aims to Resolve these Issues

The Layer Protocol aims to allow asset sharing companies to efficiently share user reputation data with each other. By sharing a reputation system, companies can incentivize good behavior by providing responsible users with rewards that can be redeemed on any platform using the Layer Protocol. Responsible users will also benefit because they can bring their good reputation with them to a new platform they have never used before.

PIN Protocol will be first adopted by Spin

Spin is a leading personal mobility platform in the US that allows users to rent stationless e-scooters, e-bikes, and bicycles within designated cities and campuses. Spin is live in over 50 markets in the US, and has served almost a million rides in less than a year.

The Layer Protocol will be Spin’s de-facto reputation and rewards system. Spin will reward users through reputation increases and Layer tokens for desired user behavior such as frequent ridership and responsible parking.

Update: Please Note: Until further notice, airdrops have been discontinued.

Quantstamp to Audit Layer Protocol was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Ink Protocol embodies Listia’s effort to bring their expertise of P2P marketplaces to the blockchain, and specifies an interface and state transition system that marketplaces should adhere to. Through adoption of multiple marketplaces, user reputation can be aggregated and tracked across markets. Significantly, Listia will transition their existing marketplace to use their blockchain-centric protocol after deployment, bringing in millions of users to the protocol immediately.

Our audit was performed in close collaboration with the Listia team and below we highlight some of the findings. It is important to note that any concerns raised during the audit have since been addressed by the team, and their token sale has already completed successfully.

Token Sale Contract Audit Findings

1. There were a few places where extra require statements and explicit modifiers could make the code safer and more readable. For example, the _max parameter for addContributions() limits the amount a user can contribute to the sale. However, if the _max parameter were set to lower than the global minimum contribution of 0.1 Ether, then the user would never be able to contribute. A require statement was added to ensure that _max is always set to at least the global minimum. As another best-practice, state variables should all have explicit modifiers. This was not the case for “etherContributed” and “xnkPurchased”.
2. We ran automated analysis tools on their contracts, but only found minor warnings due to “call.value()” invocations in onlyOwner functions, which we do not believe are problematic.
3. There were a few path conditionals that are not exercised for their false values in the tests (e.g. the if-conditionals in “updateContributor” and “removeContributor”), but since there are no else-branches this is also minor.
4. The functionality of the standard Pausable contract had been effectively re-implemented in InkPublicPresale.sol. While there does not appear to be any issues concerning these functions, we recommend using the standard implementation from Zeppelin.

Ink Protocol Contract Audit Findings

The Ink Protocol contracts effectively implement a state transition system to facilitate P2P transactions . The focus of our audit was ensuring that the smart contracts adhere to the intended semantics of the state transition system. We found no issues in this regard.

Interestingly, the protocol is designed in a way such that other marketplaces can take advantage of Ink, and user reputation can be aggregated across marketplaces. A new marketplace can utilize Ink Protocol by implementing the Ink interface and its associated components, such as transaction mediators, which settle disputes between buyers and sellers. As such, the success of marketplaces that wish to use the protocol, as well as the safety of the users of a potentially buggy or malicious marketplace, inherently rely upon the implementations of these components. Thus, if the Ink protocol contracts themselves can limit the amount of damage faulty marketplace contracts can cause, this would add confidence to marketplace end users, and further lead to positive adoption of the protocol.

The following was a change adopted after discussing our audit with Listia. When executing a transaction in the Ink Protocol, certain conditions may require calls to an external mediator contract. This contract settles disputes between buyers and sellers, and may additionally take a transaction fee for the mediation work. One concern was whether faulty calls to these external contracts could, in some sense, “lock up” the state transition system, preventing a transaction from ever finishing.

However, since the protocol enforces time-limits on certain states, such as how long a mediator is allowed to resolve a dispute (which involves locking the transaction fee), it was determined that a faulty mediator will not indefinitely lock funds. However, to further mitigate this concern, gas limits were imposed on many external contract calls, allowing the protocol to proceed even in the case of such faults, limiting some effects of faulty marketplaces implementing the Ink Protocol.

Final Thoughts

The Listia team were excellent collaborators throughout the entire audit process. The Quantstamp team thought that Listia wrote quality token sale and protocol smart contracts. Any issues raised by the Quantstamp team were quickly resolved by Listia. Quantstamp looks forward to collaborating with other teams in the future to enhance the security standards of their smart contracts.

Audit Results of Listia’s Ink Protocol was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

This past week, we continued our mission of securing the global blockchain by embarking on a Japanese tour. By engaging with the community, startups, and corporates, we want to build the bridge between Silicon Valley and Japan.

Japan is a leader in both the traditional tech and the global blockchain community. We have been fortunate enough to meet with the established companies like GMO, leading seed funds like BeeNext, and promising startups like DMM.

One common thread throughout our conversations have appeared: Japan’s eagerness and openness to accept technologies like blockchain that can transform our everyday lives.

We want to make a concerted effort to connect with the Japanese startup/crypto world to share best practices across borders, expose them to smart contracts and crypto and to establish key relationships with Asian blockchain companies and projects.

Joining me on this trip will be several members of the Quantstamp core team from San Francisco. We will also be joined along the way by representatives from Omisego, NuCypher and Zilliqa.

Japan is living in the future. The government is creating a regulatory framework for cryptocurrencies, corporates are incentivized to adopt smart contracts, and serial entrepreneurs are applying their experience to the decentralized web. I can’t wait to see what happens next.

Quantstamp Japan Tour was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

As I made my way to the bus that would take all Y Combinator founders to our next YC event, I was surprised at how excited I felt. The sensation in my stomach reminded me of what it was like to go to class on the first day of high school. Having started companies of our own, it was the first time Steven and I had felt that in a long time.

Right after our bus took off, our fellow YC founders started bombarding Steven, Quantstamp’s co-founder and CTO, and I with questions about crypto. We spoke to them for a bit but after a few minutes, Steven and I couldn’t resist the urge to pull out our laptops and start working. As the custodians of a blockchain network under development, there is always so much work to be done and we had to take advantage of every moment.

When we arrived at YC, we started group office hours. In office hours, founders share the challenges they are facing and provide each other with great feedback. Office hours are moderated by former CEOs of high-growth companies, so we receive feedback from some of the most successful business leaders in the world. I wish I could share more details, but we promised to follow Vegas Rules. What is said in office hours stays in office hours.

After office hours, Sam Altman, the President of Y Combinator, gave a presentation. He discussed several military quotes and applied these quotes to running a successful business. One particular part of his presentation stood out to me:

Make a long term commitment to yourself and to each other.

He connected this idea to the tendency of businesses to focus on short term goals in order to please institutional investors and acquire funding. Sam recommended that we align our every action to fit our long term goals and to make smart decisions that trade short term discomfort for long term gain. This made me recognize that I believe Quantstamp is particularly well positioned to focus on our long term goals.

Some CEOs from traditional companies make it their full time job to appeal to traditional investors in order to receive funding. Quantstamp is relatively fortunate, given the success of our recent offering, in that we can dedicate more of our time to developing a protocol that has the potential to enhance the security and future of blockchain technology.

During the dinner, Steven sat next to a group of founders. The topic of the conversation switched to the earthquake, which happened the previous night. After a while, the person he talked to got up in from of the room, and started giving a speech. It turned out he was sitting next to Drew Houston, the CEO of Dropbox. Drew gave an inspirational speech about his experiences at Dropbox, growing the company to more than 1000 employees. A key takeaway from his speech at the dinner was that companies face a different set of challenges during each phase of its growth and that it’s smart to plan ahead for the next stage.

More on our experiences at Y Combinator coming this Sunday Jan 21st.

Quantstamp Office Hours at Y Combinator was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

Quantstamp has completed an initial audit of Listia Inc.’s Ink Protocol smart contract. Listia aims to disrupt traditional peer-to-peer marketplaces by tracking the reputation of sellers across multiple markets using the Ink Protocol. With over 10M users, Listia is aligned with our mission of bringing blockchain technology to the mainstream. Like Quantstamp, Listia is also a Y Combinator company. In addition, they are backed by Andreesen Horowitz.

Currently, sellers with established reputations on one platform need to rebuild their reputation from scratch when selling products at a new marketplace. This not only hinders the business of trustworthy sellers, it also means that buyers do not always purchase their products from the most trustworthy sellers on any given platform.

The Ink Protocol solves this problem by tracking seller reputation and consumer feedback using the Ethereum network anytime a purchase is made with XNK tokens. By tying this information to Ethereum, any existing peer-to-peer marketplace can draw from this database to track the reputation of their sellers across multiple platforms. This not only allows for sellers to build their reputation over multiple platforms, it also gives buyers a more comprehensive view of any given sellers reputation.

Listia is a peer-to-peer marketplace that currently utilizes centralized digital currency. This marketplace has over 10 million users that have collectively exchanged over 100 million items. Listia plans to switch its entire user base over to the Ink Protocol by replacing all of their centralized digital currency with XNK tokens.

“Listia Inc. is proud to announce that Quantstamp is auditing the Ink Protocol smart contract,” says CEO and Co-founder Gee Chuang. “This allows us to deliver a product to our users that not only revolutionizes the peer-to-peer marketplace but also provides a better experience for our users.”

To learn more about Listia — click here.

To learn more about Quantstamp — click here.

Quantstamp to Audit Ink Protocol was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

The sun never sets on the blockchain and while it is Friday in Asia it is still Thursday in the U.S. and it is Thanksgiving day. A holiday for people to slow down and give thanks to each other. In the spirit of this holiday, I want to take a moment to reflect and thank those who have helped us at Quantstamp so much this year.

I am so overwhelmed and thankful for the incredible support from around the world for our project. Recently, I have been talking with mentors and advisors about this experience and how we can express the immense gratitude that we have for everyone who supports our vision of securing Ethereum.

In this post I want to acknowledge a group of experts and venture capitalist firms who have invested in and supported us. While this is not an exhaustive list, here are some of the great organizations and firms that have joined our family. At first, I just wrote about Kenetic Capital, but in the end I decided to make a post about everyone so that it is fair.

Y Combinator

Y Combinator is the premier startup accelerator in the world. The YC partners work closely with each company to get them into the best possible shape for growth. Quantstamp is joining the Winter 2018 class cycle. Each cycle culminates in Demo Day, when the startups present their business plans to a carefully selected, audience of investors.

Quantstamp is solving a critical issue with smart contracts on the blockchain. Smart contracts are growing at an exponential rate and could become a billion dollar market, yet are vulnerable to hacks that prevent widespread adoption. At Y Combinator, we support big world-changing ideas, and are proud to support Quantstamp.

Aaron Harris, Y Combinator Partner

Luna Capital

Luna Capital is a leading cryptocurrency hedge fund in Silicon Valley, founded by Lindsey Maule from Precursor Ventures, Travis Gough, the Cofounder of Coinsource, and Michael Mazzotta. Luna Capital partners use their 12 years of combined experience to help blockchain companies build a legacy in the industry. Luna Capital has also traded over $100 million worth of digital assets and attributes their portfolio success to the emphasis they place on investing in quality teams.

Lindsey Maule was essential to Quantstamp’s early success. She did not only help our project by offering us Luna Capital’s funds, she also helped us by leveraging her extensive network and offering us her extensive expertise.

“I was one of the first investors in Quantstamp. The problem Quantstamp is working to solve is essential to the mainstream adoption of blockchain technology. More importantly, Quantstamp’s team has the skills necessary to bring their vision into reality.”

- Lindsey Maule, Founder of Luna Capital

TLDR Capital

TLDR Capital is a digital currency investment and advisory firm headquartered in London. They achieve superior risk-adjusted returns for their investors by recognizing the long-term potential of blockchain projects before other do. TLDR Capital values continuous improvement, integrity, intellectual honesty, teamwork, process over outcome and the drive to be world class.

Here is an excerpt by Thomas Graham on Quantstamp:

Quantstamp is an amazing example of crypto eating the world. Quantstamp’s CTO, Steven Stewart, and I have worked together on a number of projects over the years (none as exciting as Quantstamp) and it was not long ago that we were sitting around with Richard Ma discussing different protocols and projects that would benefit the community and ecosystem. One idea that bubbled to the top was based on the formal methods research to which Steven had dedicated his studies — and it became Quantstamp.

For years, Steven had been investigating ways to integrate his research into commercial or open projects but it was not until the crypto ecosystem really became a new innovation platform that it made sense. Now, the best minds are gathered together at Quantstamp with the motivation and support to bring this tech to life.

I think that crypto — in all its forms — provides a new logic for human coordination and an opening up of the modes of innovation that have previously been very tightly held. I am excited for the Quantstamp team and the whole community for what is to come!

Kenetic Capital

Kenetic Capital empowers entrepreneurs building the next 50 years of the Internet and accelerate Blockchain adoption by bridging the corporate world and the Blockchain community.

Jehan Chu, a founder of Kenetic Capital, has also been essential to the cultivation of the blockchain community in Hong Kong. He is a founder of the Ethereum Hong Kong and Hyperledger Hong Kong communities and a cofounder of the Bitcoin Association of Hong Kong. Ethereum Hong Kong has grown to over 1,100 members and has hosted Vitalik Buterin as a speaker on 7 occasions.

Kenetic is committed to the ongoing development of a safe and secure Blockchain ecosystem, and we are very excited to support Richard and the Quantstamp team in making smart contracts smarter and safer.

Jehan Chu, Founder of Kenetic Capital

Science Blockchain

Since Science started in 2011, they’ve co-founded and invested in more than 70 companies and exited multiple companies including Dollar Shave Club (acquired by Unilever for $1B), HelloSociety (acquired by New York Times) and FameBit (acquired by Google). They have a track record for identifying legacy industries and creating platforms for innovation.

They believe that blockchain is the next major platform for innovation and a foundational technology — that it has the ability to change the way both business and social structures work.

Team In Residence

Team in Residence is a group of successful entrepreneurs and venture capitalists that partner with talented innovators to create sustainable enterprises. Their belief is that by providing talented innovators with a well rounded team that brings expertise, relationships, and access to capital, entrepreneurs can both realize their vision and be rewarded in the process. Past Start up and Blockchain investments include Slack, Omisego, Filecoin and 0x.

Blockchain Partners Korea

Blockchain Partners Korea is an expert group of blockchain evangelists in the Korean IT industry. They have partners in various fields such as serial entrepreneurs, developers, investors, and law. Their vision is to connect Korea with leading blockchain projects around the world. They have a track record of successful investments including OmiseGo.

ICONIC Capital

ICONIC Capital is the leading ICO consulting and investment firm in Asia with an excellent track record of companies such as TenX, the largest ICO in Asia with $80 million USD raised. Chris Miess, ICONIC’s founder and CEO, is the former CFO at TenX and previously, he worked in M&A at Goldman Sachs in London.

We at ICONIC Capital invested in Quantstamp because we believe in the company’s potential to fundamentally disrupt the smart contract market by automating a large part of the auditing work. Richard, Steve and team are a perfect mixture between vision and execution. This could well be a billion Dollar company.

Chris Miess, ICONIC Capital Founder & CEO

Turing Capital

Turing Capital is a high-tech alternative investment firm specialising in automation and scripting. Following years of research and tests, we have translated numerous trading philosophies into portable codesets, allowing trades to be made without human intervention.

Block Asset Management

Block Asset Management is the token investment arm of Fenbushi Capital. Renqi, the well-connected investment lead at Block Asset, believes in helping projects in their portfolio with introductions to build synergies and create long-term value. Block Asset management approaches investment from the perspective of Venture Capital — with holding horizons between 5–10 years, and therefore places a lot of emphasis on team, governance and execution. They are one of the top cryptocurrency funds in Asia.

Thank you all for your support and love. Together we will achieve our shared vision.

Love you all,

Richard

Click here to learn more about Quantstamp.

Thanksgiving Day Announcement was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

Yesterday, Steven and I attended the kick off event. During the opening ceremony while Y Combinator partners were giving speeches, Steven and I were the only founders on our laptops working in the back of the room. We were hammering away on tasks ahead of our token sale. In the start-up world, things happen very quickly, but, as you all know, things move even faster in crypto. Steven was working on our website backend with our engineers, I was strategically controlling operations from inside the YC kickoff meeting.

After the speeches concluded, the cohort start-ups were grouped into related fields in order to build relationships and become more familiar with each others projects. We were placed in the Fintech/SaaS group and Quantstamp was the only crypto company there. We all pitched our ideas to one another and then we took turns reciting each others pitch to one another. It was a great exercise in learning how to concisely share your vision.

By the end of the event, I was so inspired by the ways my fellow founders were trying to change the world through their bold and innovative ideas. One company was developing virtual reality technology that would provide therapy to people experiencing depression and other mental health issues. Another company was developing tools to make it easier for scientists to draw technical illustrations and bring their ideas to life. And there were so many more! It was very clear that being part of YC was going to open many doors, because of the sheer talent focused in that room, both from the founders and the YC partners.

Part of our responsibilities as cohort members is to attend weekly dinners every Tuesday and Thursday in order to build a stronger community. By the end of the event, I offered to host weekly hangouts ahead of YC to further get to know my fellow YC founders. We will host them in what we call our “Founder’s Bungalow”, a loft and office space for Quantstamp in Cow Hollow, San Francisco.

Here at Quantstamp, we view ourselves as solving problems that are essential to the future of blockchain technology. Enhancing the security of smart contracts is an essential step to making blockchain the backbone of the new economy. Y Combinator has the reputation to do whatever is in their power to make companies with innovative ideas thrive and I cannot wait to take full advantage of this partnership to bring our vision into reality.

Some pictures from the event:

My Experience at the Y Combinator Induction Ceremony was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.

During the selection process, we met really amazing people like Aaron Harris, a Y Combinator partner, and Avichal Garg, a former Director of Product at Facebook. Working with them convinced us that Y Combinator could help us meet other innovators and gain the skills needed to grow Quantstamp. As a result, we decided to accept Y Combinator’s offer when they invited us to join their Winter 2018 class.

When we asked Aaron why Y Combinator accepted our company, he said, “Quantstamp is solving a critical issue with smart contracts on the blockchain. Smart contracts are growing at an exponential rate and could become a billion dollar market, yet are vulnerable to hacks that prevent widespread adoption. At Y Combinator, we support big world-changing ideas, and are proud to support Quantstamp.”

We look forward to learning from our experience at Y Combinator, both from the Partners and our fellow founders. We are looking forward to joining a vast network of YC alums that can open many doors, and working to build our company into a world-class startup.

Thank you all for joining us on our journey.

Richard

Quantstamp is Joining Y Combinator was originally published in quantstamp on Medium, where people are continuing the conversation by highlighting and responding to this story.