ShibaSwap, a decentralized exchange with a dog theme, has had quick success, but there are concerns that the liquidity providers are investing money in an unclear protocol with dubious security.
Shiba Inu’s creators launched its DEX with appealing yield incentives for liquidity providers in an effort to capitalize on the popularity of their Doge-style token, Shiba Inu (SHIB), during the Elon Musk-fueled dog-token trading frenzy. The protocol had over $1 billion in total value locked (TVL) within 24 hours after its debut.
DeFi Safety, a platform reviewer, gave ShibaSwap a score of just 3% in a report, significantly below the site’s threshold of 70% for passing.
DeFi Safety referred to the result as “a devastating fail,” failing ShibaSwap on all but 2 of the 22 review criteria, with the procedure receiving a score of 30% for the white paper’s informational clarity.
Rex Hygate, the creator of SecuEth and Caliburn Consulting, wrote the review. ShibaSwap’s anonymous staff, lack of transparency and documentation, absence of a public software repository, lack of a development history, and lack of a method to test the code were all emphasized by him.
Since then, Certik, which has partnered with Crypto.com, Ontology, and Neo among others, has audited the platform. The audit discovered 8 significant concerns, which it advised the team to address and then marked as resolved. By using a 6 of 9 multisig, many of the centralization problems were alleviated.
After the release of Cerik’s audit, DeFi Safety boosted the rating to 35%, with the highest gains in the “Security” and “Access Controls” ratings, which each received 79 percent and 57 percent, respectively.
In a blog post, Solidity developer Joseph Schiarizzi cautioned readers that for the most of ShibaSwap’s first day of operation, its staking contract had been controlled by just one address.
Although Schiarizzi cautions that each of the addresses may be under the control of a single company, ShibaSwap has now modified the contract to a multi-signature account needing 6 of 9 Safe Owners to approve on transactions before they can be implemented.