A consortium of blockchain tech companies supporting Ethereum developers has announced the formation of the Ethereum Trust Alliance (ETA). The ETA is launching a Moody’s style ratings system that will rank the security of a smart contract.
Dedicated to making the Ethereum ecosystem a trusted environment for enterprises to process financial transactions and store value via the network’s decentralized applications, the ETA says the industry needs a formal body that can help professionals determine if best practice have been followed and known vulnerabilities disclosed.
The ratings system is intended to provide more transparency in the space, allowing users and institutions to assess risks.
Alluding to the Parity multi-sig wallet, an Ethereum client with smart contract vulnerabilities that led to the loss of over 150,000 ETH in July of 2017 and then the freezing of another 513,774 ETH in a separate incident in November of 2017, the ETA states,
“As we have seen many times, it only takes one small flaw in smart contract code to lock up or lose tens of millions of dollars in an instant. Today there is no way to easily tell that one smart contract has been through a full security audit by a professional team while another has not, yet we click the send button anyway.”
Like Moody’s, the bond credit rating scale that produces international financial research and grades corporate and municipal bonds from “Aaa,” for the best, to “C,” for the lowest, the ETA will create a registry of smart contracts, allowing users to query the security rating level of a smart contract before interacting.
“If only we had these ratings during the ICO boom of 2017, we believe that many of us who were woefully uninformed about fundamental risk indicators would have had the information required to make better decisions.”
Founding members MythX, Quantstamp, Runtime Verification, Sooho, SmartDec and ConsenSys Diligence will begin rolling out the new system in the first quarter of 2020.
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