Security and Risk Control

Decentralized financial applications (DeFi) are an emerging type of consumer-facing financial applications composed of smart contracts deployed on permissionless blockchains.

According to Defi Llama, a multi-chain TVL stats dashboard, the Total Value Locked (TVL) in DeFi applications across blockchains is estimated to be $40.81 billion USD as of November 2022.

While DeFi applications provide innovative financial solutions to individuals and institutions, it comes with new risk areas that are completely different from those risks associated with existing financial institutions.

Identifying and Managing Risk in Decentralized Finance

DeFi applications introduce a complex and challenging environment where the use of programmable smart contracts results in transferring the risks to the infrastructure layer itself. DeFi applications deployed as smart contracts are subject to various security risks related to hacking or coding errors which may cause significant loss of capital. As such, identifying and managing risks is an essential part of sustainable DeFi solutions in order to protect the users of the DeFi applications.

Gold Standard DAO — Risk Management

The Gold Standard DAO protocol is designed with sustainability, accessibility & security in mind. The core team carefully assesses all potential risks and ensures that funds are managed in a manner that minimizes exposure to risks and maximizes yield. Please refer to our Litepaper for additional information on the Gold Standard DAO Protocol: https://goldstandarddao.medium.com/gold-standard-dao-litepaper-updated-241ce0839cf4

Security of the protocol:

Testnet: The protocol was subject to a rigorous test by experienced developers and users from the community to identify any issues before launching on mainnet.

Audit: The protocol is audited by Certik, a pioneer in blockchain security specialized in identifying and eliminating security vulnerabilities in blockchains, smart contracts, and Web3 apps using the most rigorous and thorough cybersecurity techniques. The results of the audit can be found here: https://www.certik.com/projects/gold-standard-dao

Bug Bounty: [TBD]

Vault Manager Risk Assessment

All good fund management is based on risk management and operations. We can create an optimal solution for this using blockchain and smart contracts (code).

The Gold Standard DAO uses a variety of decentralized financial platforms and stablecoins, the core team carefully assess the risk associated with those platforms and stablecoins before using them. Below is a list of factors that are assessed prior to selecting a yield aggregator or a stablecoin. The core team will continue to assess those risks by monitoring the relevant factors to ensure that risk levels are adequately maintained.

Yield Aggregators:

• Number of years in operation.

• Total Value Locked (current and historical).

• Audit results.

• Previous security vulnerabilities and hacks.

• Number and composition of pools.

• The protocol native token (governance, whale dominance, Market Cap / TVL ratio, CEX listing, etc…).

• Success or failure of other projects associated with the same team.

• Social media sentiments about the protocol.

• Strength of the community.

The GS DAO team assessed and selected the below Yield Aggregators for integration into the GS DAO protocol:

• Homora V2

• BenQi

• Beefy

Stablecoins:

• Underlying collateral structure

• Liquidity and listing on DEX/CEX

• Price stability

• Safety and transparency (reserves)

• Market Cap, circulating supply, trading volume

• Audit result

• Social media sentiments about the stablecoin

• Previous security vulnerabilities and hacks

The GS DAO team assessed and selected the below stablecoins for integration into the GS DAO protocol:

• USDC

• USDC.e

• DAI

• USDT

Monitoring Rumours of Risk

The Gold Standard DAO team are always monitoring for rumours of potential risks or flaws within the defi ecosystem. If we can spot a risk early, it can be avoided and mitigated.

Potential Insurance Options

We are looking into options of insurance on our vaults. This adds an extra layer of protection in case of an emergency.

Regulatory Issues

The platform abides by regulatory parameters that may be presently set.

Liquidity

All assets used are sufficiently liquid with over 1 billion worth of supply. Primarily USDC being accepted in most crypto environments.

To conclude;

The GSD team are adamant to do everything possible to manage risk such as = Avoid / Mitigate / Transfer / Accept risk management strategies.

If you have any questions feel free to send us a message in our Discord.

From the GS team;

All shall prosper.