Today, we are happy to announce that Karpatkey, a leading DeFi-native organization specializing in professional DAO treasury development chose to partner with Hypernative, an on-chain security and risk prevention platform to mitigate various risks facing asset and DAO managers.
The world of DeFi is full of opportunities, but it also comes with high risks. This customer case study emphasizes the need for asset managers to leverage on-chain security and automated risk prevention, highlighting the professional and relentless approach Karpatkey employs in leveraging best-in-class tools to secure their operations and protect the funds they manage for their DAO customers.
The Challenge
Asset managers need to take into account a vast number of risks across multiple categories: smart contract vulnerabilities and security, technical risks of smart contracts and blockchains, governance and community risks, 3rd-party risks from oracles and bridges, as well as various financial risks, which are ever-growing and changing due to the dynamic nature of DeFi.
Each risk category encompasses a whole world of complexity that manifests in some form or other over time. Thus, it is crucial for asset managers to detect the risks prior to exposure and loss, as every second counts when it comes to money management. Moreover, it is mandatory for any monitoring solution to have very low false alerts to avoid alert fatigue and ensure proper attention and timely response to generated alerts.
Naturally, detection is just the first step, as an automated reaction to detected risks could be all the difference between losing and saving the managed funds.
The Solution
When we started working with Karpatkey, the first stage was to understand their activity and associated risks and map the Hypernative monitoring capabilities to the specific needs. Then, we configured the Hypernative platform to monitor the risks and provide alerts to the associated channels, wherein each channel leads to a different response action by the Karpatkey team and infrastructure.
Furthermore, the teams established joint communication channels and collaborated closely to further improve and deepen the implementation, embedding new capabilities and features as they are added to the platform.
Karpatkey leverages Hypernative’s robust anomaly-based and machine-learning detection agents for each of the above risk categories, providing solutions for over 200 of the most common risks in the industry. The list is constantly updated according to customer requirements and their developing needs.
Here's what Karpatkey says about working with Hypernative:
“The things that impressed us the most about Hypernative were:
- How interested the team was in ensuring that the platform really delivered value to us
- The team's willingness to develop what was necessary to effectively monitor the risk factors related to our DAO´s positions.
- The development of an ML model per our request to prevent stablecoins depeg and ether derivatives price deviations, with alerts triggered by anomalies as opposed to customized thresholds.
To build and maintain such a system we should have a much larger team of developers and researchers”.
Examples of Hypernative detections:
In early March, the Hypernative platform detected a high-severity alert related to USDC on-chain price de-pegging, prior to any public information being released. The relevant machine learning model examines metadata of large pools' behavior and composition, identifying anomalies that can indicate upcoming price swings.
The alert itself was very accurate and actually triggered a few hours prior to USDC on-chain price deviation. A similar alert was generated at the event of the Terra/Luna collapse.
Another recent incident was Hypernative detecting the Euler protocol hack before the hack transaction was broadcasted. The platform correctly identified the attacker's actions, including the deployment of malicious contracts, the activity of the MEV bot that front-ran the exploit, the attackers' malicious actions, and further related events. The Hypernative team reached out in real-time to the Euler team to warn them on the protocol Discord channel.
Karpatkey: “The most important functionality for us is the advanced security detections, alerting us to hacks and exploits that may threaten our positions, These alerts would enable us to automatically exit a position in a potentially affected protocol before any funds being actually stolen. “
If you are interested in evaluating how Hypernative can help you secure your operations and protect the assets you manage, whether as an asset manager, DAO, DeFi protocol, or chain, we would love to hop on a call and discuss your needs. Please email us at contact@hypernative.io or visit our website at https://www.hypernative.io
About
karpatkey:
Karpatkey helps DAOs to preserve capital through state-of-the-art risk management and trust-minimized DeFi treasury execution. They’ve been working with GnosisDAO, Balancer, ENS, and CoW Protocol, to diversify their treasuries into sustainable portfolios of DeFi investments designed to support the DAOs in their missions.
https://www.karpatkey.com
Hypernative:
Hypernative stops zero-day cyber-attacks, economic risks, detects on-chain anomalies, and protects digital assets, protocols, and Web3 applications from significant losses or threats.
Powered by our “pre-cog” platform, Hypernative monitors on and off-chain data sources using our proprietary machine learning models to accurately predict cyber, economic, and governance threats before they happen and connect these to automated playbooks in order to prevent and mitigate risks in real-time.
https://twitter.com/HypernativeLabs
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