Blockchain cybersecurity startup OpenZeppelin this morning announced a $23 million investment in Forta, a security service aimed at smart contracts.
Andreessen Horowitz led the round, which OpenZeppelin CEO and co-founder Demian Brener described as 3x oversubscribed. The investment also attracted capital from Coinbase Ventures, True Ventures and Blockchain Capital, among others.
Per Brener, OpenZeppelin will retain a stake in Forta.
Forta is a neat project that comes at an interesting point for the larger blockchain community. When bitcoin came to market, it attracted interest as a potential medium of exchange, or perhaps a store of value. The latter use case wound up being the key bitcoin value offering. But while bitcoin was maturing, other blockchains were built that featured more native programmability, allowing developers around the world to leverage smart (self-executing) contracts for a host of use cases.
Ethereum is one of the best-known blockchains to feature smart contracts, which its foundation describes simply as “program[s] that [run] on the Ethereum blockchain.” There’s more nuance to the matter, but that will suffice for our needs today. Forta, in turn, wants to help secure smart contracts across the blockchain market.
We summarized it as an attempt to build Web 3.0 security using Web 3.0 DNA when we were chatting with Brener, and he agreed. By that, we mean that Forta isn’t precisely the sort of company that TechCrunch tends to write about when it comes to venture capital fundraises; instead, Forta is nearly an attempt to empower a community of developers to build the tooling that they need to keep their own projects secure.
The heart of Forta, Brener explained, is a community of “agent writers,” or developers creating pieces of code that hunt up threats — on layer-one or -two chains, and sidechains — that fall into one of four main buckets of risk, namely cybersecurity, financial, operational or governance. The other half of the Forta project is nodes, or essentially what runs the agents themselves.
Per OpenZeppelin, lots of the code used to write Forta agents will be repurposable, which could help code get written once and then deployed with variations to many chains. This is what Brener means when he thinks of Forta as helping developers in the larger blockchain world help themselves.
And the concept is not idle. Per a release from Forta, the team behind the project thinks that the “pace of innovation on public blockchains” is rapid enough that no “centralized solution can effectively address these evolving risks.” So, threats attacking the decentralized market will have to be solved, in Forta’s view, by even more decentralized activity.
TechCrunch was obviously curious how the Forta project would make money. Brener said that for the project to become a business, it will need to first help its community thrive. Part of that is opening its doors a little more today, allowing more developers than it did during its private beta to write agents.
Presuming that Forta can attract as many developers as it hopes, it will become a centralized source of smart contract security tooling. From that point, making money won’t be impossible, though it will be interesting to see precisely what business model Forta eventually chooses.
On the point of organizational centrality, Forta is today run by a set of folks. In time, the company could become a decentralized autonomous organization, or DAO, Brener said. If that bears out, the blockchain community will have managed to take external capital and internal knowledge, blended the two into a development community, and built not only security tooling for smart contracts, but managed to do so under the auspices of its own smart contract (DAO). So, this is at once a venture capital story and also a meta-moment for how far the crypto world has come in terms of taking care of itself.
I am sure that at some point in the above paragraphs I got something slightly wrong. Such is the risk of covering nascent efforts to build security tooling for the cutting-edges of the digital economy. But what matters more than any particular quibble is that the blockchain world is working to build the tools it needs to keep smart contracts safe; by doing so, using smart contracts should become less risky. And less risk means more market appetite.
That’s something that a16z, with its huge crypto-focused bets, and companies like Coinbase are more than in favor of. The dollars flowing toward Forta are a rounding error for its wealthy backers, even if its possible impact on their favorite market might be anything but.