AI-Based Smart Contract Auditing Tool that saves millions from being stolen

[GENERAL] Name and surname of main applicant

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

We will develop an AI-powered tool that automates the auditing of Cardano smart contracts, identifying vulnerabilities, bugs, and inefficiencies quickly and accurately.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies

[GENERAL] Will your project’s output/s be fully open source?

[GENERAL] Please provide here more information on the open source status of your project outputs

The project will be released under the MIT License, ensuring transparency and granting developers the freedom to use, modify, and distribute the code without restrictions. The code will be hosted on GitHub, providing an open and collaborative platform for engagement with the community.

[METADATA] Horizons

[SOLUTION] Please describe your proposed solution

Over $3 billion has been lost to smart contract vulnerabilities and exploits across blockchain platforms. According to Certik data in the third quarter of 2024 over 700 million dollars is being stolen from smart contract exploits. These security flaws not only result in financial loss but also erode trust in decentralized finance (DeFi) and other blockchain applications. Manual auditing is resource-intensive, expensive, and often limited in scope, making it inaccessible for smaller projects and slowing down the pace of innovation.

Our solution is to create an AI-powered smart contract auditing tool specifically for the Cardano ecosystem. This tool will:

• Automate the auditing process by scanning smart contracts for vulnerabilities and inefficiencies, using machine learning models trained on a broad set of historical exploit data.
• Identify common bugs and security issues in Plutus contracts, offering actionable recommendations to developers for improvements.
• Speed up the auditing process by providing real-time feedback, significantly reducing the time needed for contract deployment.
• Make security audits affordable for projects of all sizes, democratizing access to high-quality security tools and improving trust in decentralized applications.

This approach solves the problem by providing a fast, accurate, and accessible solution to contract security. By automating the process, we can help reduce the risk of financial loss and encourage more projects to build on Cardano securely. The project will engage:

• Cardano developers, including startups and smaller projects who may not have the resources for manual audits.
• DeFi platforms and dApp developers, who require strong security to build user trust.
• The broader Cardano community, as a secure ecosystem will attract more users and investors.

We will demonstrate our impact by:

• Tracking the number of contracts audited and the reduction in vulnerabilities post-deployment.
• Measuring developer feedback on ease of use and effectiveness of the tool.
• Collecting case studies of projects that avoided significant losses or exploits due to using the tool.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

Our project will positively impact the Cardano ecosystem by:

• Improving security: Fewer smart contract exploits will lead to a more secure and trustworthy ecosystem, encouraging users to engage with Cardano-based dApps.
• Enhancing developer efficiency: By reducing the time and cost associated with audits, developers can focus on innovation rather than worrying about potential vulnerabilities.
• Boosting ecosystem adoption: As the platform becomes more secure and developer-friendly, more projects and users will be drawn to Cardano.

We will measure the success and impact of the project by:

• User adoption rates: Monitoring the number of developers and projects that use the tool for contract auditing.
• Reduction in vulnerabilities: Tracking the number of vulnerabilities detected before deployment and reduced incidences of exploits post-deployment.
• Community feedback: Regularly gathering input from the developer community to improve the tool and ensure it meets their needs.

Outputs and opportunities will be shared through:

• Developer reports and case studies: Demonstrating the tool's effectiveness and showcasing success stories.
• Open-source contributions: Encouraging community involvement in refining and improving the tool.
• Presentations and workshops: Educating the community about best practices in smart contract security and how to use the tool effectively.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

I have extensive experience working in the DeFi and blockchain space, with a strong track record of developing secure and scalable decentralized applications. Specifically, my background includes:

• DeFi Projects: I have developed and successfully launched several decentralized finance (DeFi) applications, including X-Chain Lend and Aureus. These projects required deep knowledge of smart contracts and security, both critical areas for developing an AI-based auditing tool.
• Smart Contract Auditing: Over the years, I have gained significant experience in reviewing and auditing smart contracts, ensuring that they meet the highest standards of security and reliability. This experience directly contributes to my ability to design and build a solution that leverages AI to automate and enhance the contract auditing process.
• Active in the Cardano Community: My long-standing involvement in the Cardano community, including reviewing proposals and submission of proposals like the Unique Username Based Cardano Wallet, showcases my deep understanding of the Cardano ecosystem and its specific needs. I have also contributed to Cardano open-source repositories, including various tools that aim to enhance the Cardano ecosystem.
• Open Source Contributions: Through my contributions to the Cardano ecosystem on platforms like GitHub, I have honed practical skills in Cardano infrastructure, transaction mechanisms, and smart contract integration, which will directly support the development of the AI auditing tool.

Accountability and Trust:

I will ensure a high level of transparency and accountability throughout the development of this project by:

• Open-Source Development: The AI-Based Smart Contract Auditing Tool will be developed as an open-source project from the outset. This will allow the community to review, audit, and contribute to the code, ensuring that the project evolves transparently and with input from multiple stakeholders.
• Regular Updates and Communication: Progress reports, updates, and challenges will be communicated regularly via GitHub, Discord, and Cardano community forums. This ensures that the project remains visible to the community and that any feedback is incorporated in a timely manner.
• Collaboration with Auditors and Developers: I will actively seek feedback from both the smart contract auditing community and developers on Cardano. Their input will help refine the tool, ensuring that it meets the highest standards of quality and security.

Validation of Feasibility:

To ensure that the project is feasible and can meet its goals, I will:

• Prototype Development: I will begin by creating a working prototype of the AI-based auditing tool, which will focus on analyzing common vulnerabilities in smart contracts, such as reentrancy attacks, integer overflows, and underflows. This prototype will serve as proof of concept for the tool’s capabilities.
• Integration with Cardano Smart Contracts: The tool will be tailored for Cardano’s Plutus and Marlowe smart contracts. Initial testing will be conducted on the Cardano testnet, ensuring compatibility and effectiveness in detecting vulnerabilities in real-world scenarios.
• Machine Learning Model Training: I will use historical smart contract data and known vulnerabilities to train the AI models. This will be validated through real-time testing against existing smart contracts to ensure the tool effectively identifies risks and improves over time.
• Benchmarking Against Manual Auditing: The AI tool will be benchmarked against traditional, manual smart contract auditing methods to ensure that it offers comparable (if not superior) results in terms of accuracy, efficiency, and comprehensiveness.
• Feedback from Industry Experts: Early versions of the tool will be shared with experienced auditors and security professionals for review. Their feedback will be incorporated to refine the model and ensure its practical usability and reliability in detecting smart contract risks.

This approach ensures that the project is both technically feasible and aligned with the needs of the Cardano community, while leveraging AI to bring a new level of automation and efficiency to smart contract auditing.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Planning and Design (Duration: 1 month)

Objective:

• Define the scope, objectives, and features of the auditing tool based on research findings and industry best practices.
• Develop a detailed project plan, including timelines, resource allocation, and risk assessment.
• Build the UI/UX of the application

Acceptance Criteria:

• Clearly defined project Scope and features documentation
• Finished UI/UX design
• Project architecture design

Tool Development(Duration: 1 months)

Objective:

• Design and develop the core functionalities of the auditing tool, including static and dynamic analysis capabilities, automated testing frameworks, and customizable audit rules.
• Implement a user-friendly interface for accessing and interacting with the auditing tool, ensuring ease of use and accessibility for developers of all skill levels.
• Conduct rigorous testing and debugging to ensure the reliability, accuracy, and performance of the tool across different environments and scenarios.

Acceptance Criteria:

• Built Website
• Functional Cardano smart contract testing and auditing website

Beta Testing and Feedback(Duration: 1 months)

Objective:

• Launch a beta version of the auditing tool for testing and feedback from the Cardano developer community.
• Gather user feedback, suggestions, and bug reports to identify areas for improvement and refinement of the tool's functionalities, usability, and performance.

Acceptance Criteria:

• Report of the beta testers feedback
• Clearly identified improvement areas report

Tool Refinement, Optimization, Documentation (Duration: 1 months)

Objective:

• Incorporate feedback and insights gathered during beta testing to refine and optimize the auditing tool, addressing any issues, enhancing features, and improving overall user experience.
• Conduct additional testing and validation to ensure that the final version of the tool meets the highest standards of security, reliability, and usability.
• Create comprehensive documentation, tutorials, and educational resources to guide developers in using the auditing tool effectively and understanding its features and capabilities.
• Develop training materials and conduct workshops or webinars to educate the Cardano developer community about smart contract security best practices and how to utilize the auditing tool for their projects.

Acceptance Criteria:

• Fixed website based on identified areas from the testing phase
• Documentation Paper
• Video tutorials of the testing tool

Tool Release and Adoption (Duration: 1 months)

Objective:

• Officially release the auditing tool to the Cardano developer community, making it publicly available for download or access.
• Promote the tool through various channels, including social media, forums, developer communities, and industry events, to encourage adoption and usage among Cardano developers.

Acceptance Criteria:

• Publicly available website for Cardano smart contract testing and auditing
• Promotional data and statistics 

[RESOURCES] Who is in the project team and what are their roles?

Fraol Bereket - Senior blockchain developer and lead developer

• LinkedIn: https://www.linkedin.com/in/fraol-bereket-bekele/
• GitHub: https://github.com/fraolb
• Website: https://fraol-portfolio.vercel.app/
• Email: Fraolbereket@gmail.com

Hire Professional design to design UI/UX of the application.

Hire Cardano Developer for Testing Phase

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Milestone 1: Planning and Design

• Project planning and management: 1000 ADA
• UI/UX design: 4000 ADA

   - Total: 5,000 ADA

Milestone 2: Tool Development

• Developers cost 5,000 ADA
• Software development tools and licenses: 5000 ADA

   - Total: 10,000 ADA

Milestone 3: Testing and Quality Assurance

• Beta testing and feedback gathering: 3,000 ADA
• Testing tools and resources: 7000 ADA

   - Total: 10,000 ADA

Milestone 4: Tool Refinement, Optimization, Documentation

• Create comprehensive documentation, tutorials: 2000 ADA
• Develop training materials and conduct workshops: 8000 ADA

   - Total: 10,000 ADA

Milestone 5: Tool Release and Adoption

• Promote the tool on social media, forums, developer communities, and industry events

   - Total: 10,000 ADA

Overall Total: 45000 ADA

This breakdown ensures that each milestone has sufficient funding to achieve its objectives effectively, while also accounting for contingency and miscellaneous expenses to cover unforeseen costs or adjustments during the project lifecycle.

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The design cost is around 4000 ADA 1300$(1 ADA ~ 0.33 USD). Which is almost average price to build a quality UI/UX design that functions on multiple platforms. Like Laptops, mobile phones or extra-large screen sizes.

The costs for the developer is 3000ADA which is around 1000$(1 ADA ~ 0.33 USD). This is the minimum salary of full stack blockchain developers.

For the testing phase we aimed to have around 500 beta testers that participate on testing and giving feedback and receive 40 ADA per person.

Next to that we have building training materials and workshops. We will hire professional content creators to showcase our product in the professional manner in YouTube channel, blog websites and the company's site.

At last, we will promote our project in different social medias and events.