VaaSBlock partnered with Izumi to conduct an independent audit of their new DeFi exchange, KaiaSwap. Upon successful completion of the audit, KaiaSwap earned the prestigious RMA™ badge, proving that accountability is possible even in the often-criticized world of decentralized finance (DeFi).
The Challenge: DeFi’s Tarnished Reputation
Old dreams, Young wolves.
DeFi was initially heralded as an accountable alternative to traditional finance, offering the tantalizing possibility of one day replacing the traditional banking system. This vision quickly captured the imagination of Web3 users and builders, leading to a surge of projects aimed at making this dream a reality. However, the rapid growth of the space also attracted bad actors, resulting in a proliferation of scams that overshadowed legitimate initiatives.
Bad publicity
Several high-profile incidents contributed to DeFi’s tarnished reputation. The 2021 Poly Network hack, which resulted in over $600 million being stolen before the hacker surprisingly returned the funds, exposed significant vulnerabilities in DeFi platforms. The same year, the collapse of the Iron Finance protocol, which led to the infamous “DeFi bank run” and the loss of billions in value, further demonstrated the instability and risks inherent in the space.
In 2022, the Terra-Luna collapse shook the entire crypto ecosystem. The algorithmic stablecoin Terra (UST) depegged from the US dollar, causing a $60 billion wipeout of value and sparking a broader crypto market downturn . These events, among others, eroded trust in DeFi, turning it into a hotbed for scams and instability.
The promise of collective accountability turned into a nightmare, with scammers seizing the opportunity to steal vast sums of money without fear of consequences. Each time a trader lost funds to a scam, a vocal detractor emerged, eager to share their negative experience and warn others away from DeFi.
Some healthy examples
Although the initial DeFi bubble has burst, many legitimate players have survived the storms and proven their resilience. With the 2024 bull market in full swing, these projects are beginning to see the fruits of their labor as funds flow back into the space and trust is gradually rebuilt. Izumi, a company with a strong track record of successfully operating multiple DeFi exchanges across different chains, is one such example of resilience and longevity.
The Opportunity: Building KaiaSwap’s Credibility
When the Klaytn Foundation announced its collaboration and the upcoming launch of the Kaia Chain, it was only a matter of time before DeFi platforms sought to establish exchanges to support the new tokens. Izumi, with its wealth of experience, was quick to seize this opportunity, leading to the creation of Kaiaswap.
With the platform ready to launch, Izumi turned its attention to building credibility among potential traders and token projects. In addition to standard marketing activities, the Kaiaswap team approached VaaSBlock, seeking to undergo a rigorous audit with the goal of earning an RMA™ badge. The hope was that this badge would not only accelerate the platform’s growth by attracting partnerships and users but also position Kaiaswap as the leading DeFi exchange on the Kaia Chain.
The Solution: Verifying a DeFi Platform
The initial question VaaSBlock faced was whether a DeFi platform could even be verified, given the inherent challenges of decentralization and user anonymity. Traditional verification methods seemed ill-suited to the unique nature of DeFi. However, during the audit process, it quickly became clear how professional the Izumi team was and how meticulously planned the Kaiaswap exchange had been.
Any initial concerns were quickly dispelled as VaaSBlock conducted a thorough audit, ensuring that Kaiaswap met the minimum standards across all six audited criteria. VaaSBlock was able to adapt its processes without compromising the integrity of the audit, ultimately awarding Kaiaswap the RMA™ badge.
The Outcome: A New Standard for DeFi
By earning the RMA™ badge, Kaiaswap has solidified its reputation as a trustworthy and accountable platform in the DeFi space. This achievement not only sets Kaiaswap apart from less reputable exchanges but also positions it alongside well-established brands with proven track records. As Kaiaswap continues to grow and attract new users, its commitment to accountability and transparency serves as a powerful example of what is possible in DeFi when projects are built on a foundation of integrity.
In a space where trust is hard to come by and accountability is often questioned, earning a credible audit badge like the RMA™ can be the difference between success and failure. If your DeFi project is ready to stand out from the crowd and build lasting trust with users and partners, VaaSBlock is here to help. Contact us today to learn how we can work together to establish your project as a leader in the DeFi space, just as we did with Kaiaswap.
About Vaasblock
Vaasblock, founded in early 2024 by three industry veterans, specializes in blockchain credibility and verification services. Our mission is to enhance trust and reliability within blockchain ecosystems by providing comprehensive auditing and certification through our NFT-Verified RMA™ badge. By focusing on corporate governance, crisis planning, revenue models, and business security policies, Vaasblock ensures that organizations meet the highest standards of integrity and performance. Projects awarded the RMA™ badge stand out for their verified legitimacy and quality. Stay updated with our latest news and developments through our media channels: Website | LinkedIn | X | Threads
