Contract Risk Scanners

Contract Risk Scanners are designed to be a tool used by crypto users, to determine the risk level of a cryptocurrency, based upon the programming of the currency contract. The context behind contract risk scanners is quite simply, the more 'red flags' found within the programming of a contract, the riskier the cryptocurrency may be. But herein lies the flaw inherent to all current contract risk scanners, they depend upon the assumptions made by the developers of the scanner program. For example, if a developer 'feels' that no cryptocurrency should have a transaction tax higher than 5%, should not be able to mint tokens, should not be able to burn tokens, should not be able to safeguard against threat actors, or that all contracts should have ownership renounced...well...then ALL cryptocurrencies that not meeting this person's criteria are flagged as riskier than those that do. Amazingly enough, depending upon the contract risk scanner you use, cryptocurrencies like Bitcoin and Dogecoin cannot even achieve passing a passing grade. Now an holder may be led to believe that having these scanners is better than nothing, but the issue that they create, is a false sense of trust.

Inaccurate Sense of Trust

Terra (0xbd31ea8212119f94a611fa969881cba3ea06fa3d, now called 'Terra Classic') was once deemed to be the next biggest and best stablecoin in the crypto-space, and most contract risk scanners gave it high ratings (mostly 4 out of 5, and even 5 out of 5 ratings). And yet, one fateful day in May 2022, due to reported programming issues, Terra lost its Peg, and crashed from a value over over $80.00 USD, down to $0.00018 USD in a matter of days, a drop of 99.99999775%, wiping out hundreds of millions of dollars of holder value...unlikely ever to recover. Yet despite this, the contract still continues to rank high on contract risk scanners, further underscoring the caution that risk scanners are yet to reach a level of actual reliability. The simple fact remains that a smart contract with a low or high risk score, has nothing to do with whether or not a specific cryptocurrency is legitimate or a scam, nor does it have anything to do with a cryptocurrency being successful or a scam.

Benefit of Contract Risk Scanners

That said, the one strong benefit of contract risk scanners, is that they most usually display the contract programming that the scanner doesn't like. This provides crypto users the ability to raise these contract functions as questions to the crypto team as one part of a holder's research into the cryptocurrency prior to involvement. There are hundreds of smart contracts in existence which score poorly on risk scanners, yet are being run by fully legitimate, dedicated and hard working project teams. The onus is on the users to do their research to determine whether or not a cryptocurrency is right for them.

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