Crypto Daily Topic Cryptocurrencies

Introducing Certik (CTK): Bringing Safety to DeFi

The blockchain is a new and welcome idea: decentralizing transactions, securing funds with high-level cryptography, and more. The only problem is that today’s blockchains exist in separate environments, hindering interoperability. There’s also the issue of security concerns. While cryptography goes a long way, blockchain transactions are still vulnerable to security threats, such as the hypothetical 51% attack and malicious actions by network participants. 

The Certik Protocol is a blockchain-based interoperability and security solution for blockchain networks. On the network, users can access various security solutions to protect their crypto assets. Certik launched its testnet in March 2020 and its mainnet on October 24, 2020. 

This article is a closer examination of the Certik Protocol. 

Breaking Down Certik

Certik is a blockchain effort that wants to build a safer blockchain infrastructure and decentralized applications’ environment. Based on a Delegated Proof of Stake, Certik wants to offer a more trusted and safer environment for executing decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and even IoT applications. 

The project will offer cross-chain compatibility so that blockchain projects are better off with the Security Oracle, which provides a real-time and thorough check on all transactions by flagging down any potential security threats. Below, we’ll look more closely at the Security Oracle and other key features of the Certik ecosystem. 

Certik: Key Components

#1. Security Oracle

The Security Oracle is a combination of decentralized network operators who rely on cutting-edge security technologies to identify any security threats on the protocol. These operators receive CTK tokens as a reward for this contribution. The Security Oracle can work with various blockchains, allowing users to make informed decisions before interacting with on-chain smart contracts. Smart contracts incorporated into the Security Oracle can flag and prevent malicious transactions from taking place, preventing funds’ potential loss. 

#2. CertikShield

This is a tool that enables flexible and decentralized reimbursements of crypto losses. These losses could have arisen from theft or pure inaccessibility due to security breaches. The CertikShield is made of a decentralized network of members who combine the Security Oracle’s scores with the governance system to provide collateral and vote on claims to protect blockchain networks. 

The CertikShield system is made of two types of members: collateral providers and shield purchasers. 

Collateral providers are members that deposit crypto funds into the CertikShield pool. These funds can be used to reimburse valid claims, meaning the providers can exit with less crypto than they deposited – in case of major security breaches. However, they get to earn staking rewards and a portion of the fees paid by shield purchasers. 

Shield purchasers are members who pay for the protection of their funds. Shield purchasers need to decide how much protection they want for their assets and pay a fee that directly corresponds with the level of protection. This fee goes directly to collateral providers. 

The CertikShield utilizes several safeguards to prevent manipulation. These safeguards include the following: 

  • A voting threshold that meets a majority
  • Claim requests must pay a fee to be processed
  • Approved claim requests are processed over 56 days
  • Claim requests can be stopped through a veto voting proposal of at least a 75% majority
  • Only projects with a security score of more than 80% can become CertikShield members
#3. DeepSEA

This is a secure programming language and compiling tool compatible with the Certik virtual machine, Ethereum’s WebAssembly, and Ant Financial’s Antchain. DeepSEA is the recipient of funding from Ethereum, IBM-Columbia, and Qtum so that it can accelerate its extremely secure programming language. 

#4. Certik Virtual Machine (CVM): 

The Certik Virtual Machine, which is also compatible with Ethereum’s Virtual Machine, allows users to access, check, and utilize security info to gauge smart contracts’ safety. This enables smart contracts to adjust their behavior to the security record of other smart contracts. For example, a lending contract can only approve a loan to a DAO contract if the latter provides a provable security record. Also, CVM supports a smart contracts sandbox system, whereby smart contracts whose security is yet to be verified operate in a separate environment from the rest of the network. 

The CTK Token 

CTK is the native utility cryptocurrency of the Certik platform, and it fulfills the following roles: 

  • As gas fee for executing smart contracts
  • As governance mechanism to participate in the network’s governance 
  • As a rewards mechanism for participating in the Security Oracle
  • As collateral and reimbursement for the CertikShield system
  • As a staking mechanism to participate in network consensus

The CTK token was distributed in the following manner: 

  • Binance launchpool tokens: 1.50%
  • Private sale 1 tokens: 29%
  • Private sale 2 tokens: 9%
  • Team tokens: 10%
  • Foundation tokens: 25%
  • Community pool tokens: 25%
  • CertikShield pool tokens: 8%

Community Growth Strategies of Certik

The Certik team will carry out various activities in a bid to expand the growth and reach of Certik: 

  • Collaborating with various blockchain protocols to provide security scores for users in those protocols
  • Partner and integrate with various Binance Smart Chain projects 
  • Conduct tutorials, digital and physical meetups
  • Regularly update the public through social media

Future strategies include the following: 

  • Partner with crypto aggregator sites to integrate security scores
  • Conduct both local and global hackathons

Tokenomics of CTK

As of October 28, 2020, CTK traded at $0.945717, with a market cap of $20,900,338 and a market rank of #318. The token has a 24-hour volume of $7,979,974, a circulating supply of 22,100,000, and a total supply of 100 million. CTK’s highest price ever was $1.94 (Oct 27, 2020), while its lowest ever was $0 (October 23, 2020), according to Coinmarketcap. 

Where to Buy and Store CTK

Currently, CTK is listed on the Binance exchange as a market pair of USDT, BTC, BNB, and BUSD. 

Certik provides its official wallet, the Deepwallet

Closing Thoughts 

Certik is a welcome idea in what’s a fragmented blockchain space, where every network operates as a lone island. This lack of interoperability holds back the mainstream success of blockchain. Certik’s solution, along with its industry-leading security offerings, puts it in an interesting position. We’ll be keeping a close eye on this project. 

Blockchain and DLT

Ethereum Virtual Machine: Everything you’ll ever need to know

Many people acquainting themselves with the Ethereum ecosystem tend to overlook the Ethereum Virtual Machine, yet it provides really interesting tidbits into how the Ethereum ecosystem works.

The Ethereum Virtual Machine (EVM) is the core innovation of Ethereum. It is a Turing complete software that enables anyone to run any program, provided they have enough memory space. The EVM helps developers build blockchain applications faster, more easily, and more efficiently. It provides the platform for creating countless blockchain applications in one single place, instead of having to create a new blockchain for every new application.

The EVM also prevents denial of service attacks – which are attacks targeted at making a network unavailable to users. It also ensures programs running on the blockchain do not have access to each other’s state, thus eliminating any potential interference.

Turing Complete

EVM is a quasi-Turing complete software. Turing complete is named after Alan Turing, the innovator of the Turing machine. A Turing complete machine can solve any problem fed into it, as long as there are enough time and memory space.

EVM is quasi-Turing complete because its computations are bound by gas – which in effect limits the number of calculations that it can solve.

Gas and EVM Bytecode

On Ethereum, transactions are powered by ‘gas,’ which in essence is the fee that users pay. The concept of gas can be seen in two ways: gas and gas price. 

Gas is the measuring tool of how much fee is needed for a particular transaction, while gas price is how much Ether you’re willing to spend to purchase a unit of gas. Gas price is measured in ‘Wei.’

Wei is the smallest unit of Ether – with one Ether comprising 10^18 Wei.  

If an individual wishes to conduct a transaction on Ethereum, they must set the gas limit and gas price attached to that transaction. If they don’t possess the required gas for that transaction, it will ‘run out of gas’ and hence be invalid. 

Gas can limit the number of transactions on the EVM, in this way:

  • Blocks on the Ethereum blockchain have a gas limit, meaning the gas spend on any transaction cannot exceed a particular amount
  • The gas is attached to the gas price, even if the gas limit was removed, it would be impractical to solve just any problem fed into it. 

EVM has its own programming language called the ‘EVM bytecode.’ When a code is written in a higher-concept programming language like Ethereum’s own Solidity, it is compiled in the bytecode so that EVM can interpret it. 

Transaction-based State Machine 

The EVM is a crucial part of the Ethereum infrastructure since it handles internal state and computations, account information pertaining to addresses, balances, gas price, and so on. The EVM must always keep track of the numerous network components so it can support transactions. 

A state machine is a term in computer science that refers to a machine that can read inputs fed into it and then, upon interpreting those inputs, produce certain outputs. This is how transactions on the EVM are carried out. At the start, there is a blank slate. When transactions are occurring, any point in that duration describes the current state of Ethereum. For a state transaction to occur, the ‘inputs’ entered must be valid. A transaction is validated once it successfully goes through the mining process. 

This mining process is referred to as proof-of-work (PoW) and takes place when certain network participants expend computing power so as to verify a block of transactions and add those transactions on the blockchain. Successfully completing a block gets a miner rewarded with Ether – the native token of the Ethereum blockchain. 

Now, onto the components that the EVM must continually keep track of: the Account State, World State, Storage State, Block Information, and Runtime Environment Information. 

Account State

The Ethereum platform comprises many small accounts that can interact with each other, thanks to its message-passing infrastructure. These accounts can be divided into two types: externally owned accounts and contract accounts. Externally owned accounts are controlled by their owners via private keys, while contract accounts are controlled by the contract code.

An externally owned account can send messages to other externally owned accounts and also contract accounts via the use of a private key. Communication between these types of accounts can be considered as just value transfer.

However, passing between an externally owned account and a contract account triggers the execution of the contract account code. This causes the contract account to execute the instructions in the code, for example, transferring or creating new tokens.

Unlike externally owned accounts, contract accounts cannot initiate new transactions by themselves. 

Instead, they are reactive – meaning they can only engage in transactions in response to other transactions that have been passed to them either from externally owned accounts or other contract accounts.

Three elements characterize the account state, and these are as below:

Nonce – For externally owned accounts, this is the value of how many transactions were sent from the account’s address. For contract accounts, this is how many contracts were created by the account.

Balance – This is how many Weis are owned by the account address

CodeHash – This is the immutable hash value of the EVM code for the corresponding account.

World State

This is a ‘global’ state that comprises a mapping between 160-bit address identifiers and the account state. The mapping is maintained in a data framework called the Merkle Patricia Tree – which in turn consists of nodes with:

  • Numerous leaf nodes at the bottom of the tree that houses the underlying data
  • A set of intermediate nodes with each node consisting of two child nodes
  • A single root hash born from the hash of the previous child nodes, representing the top of the tree structure

Storage State

The storage state is state information for specific accounts. This information is maintained on the EVM at runtime.

Block Information

These are state values that enable transactions to take place, and they comprise: 

  • Block hash – which is the hash of the youngest validated block
  • Coinbase – the recipient’s address
  • Timestamp – the current block’s timestamp
  • Number – the number or position of the current block
  • Difficulty – the difficulty value of the current block 
  • Gas limit – the maximum gas that can be spent on the current block 

Runtime Environment Information

This is information that allows for transactions to be executed. It includes the following: 

  • Gas Price – Current gas attached to a transaction 
  • Codesize – The size of transactions’ source code 
  • Caller – The address of the account that is conducting the transaction
  • Origin – The address of the transaction’s initiator   

Outside the Network

The EVM is situated outside the main Ethereum network, making it a perfect testing environment. Individuals and companies that wish to create smart contracts can do so on the platform, and this will not any way affect normal blockchain operations. They can also use the platform to hone their smart contract creation skills so they can eventually create more robust and applicable smart contracts.

Closing Thoughts

Smart contracts are central to a decentralized world – and the EVM is an excellent platform for developers to curate smart contracts that will make the world a better place. Being a free and highly developed tool for this process, we can’t think of a better platform where people can perfect – and ultimately showcase their coding smarts.