The Future of Due Diligence: Automated, Reputation-Driven Vetting

VCs and protocols lack a standardized, real-time source for protocol health. Manual data aggregation is slow and subjective.

• Automated Scoring: Real-time metrics for security, economic sustainability, and team track record.
• Composable Data: Reputation scores become inputs for DeFi lending, governance, and partnership decisions.

Security and performance audits are monolithic, expensive, and non-transferable.

• Restaked Security: Leverage EigenLayer to bootstrap trust for new vetting modules (e.g., slashing for faulty analysis).
• Specialized VMs: Use Hyperliquid's high-performance L1 to run complex risk models with ~100ms finality for real-time alerts.

Capital deployment is manual and inefficient. Investors declare goals, not transactions.

• Solver Networks: Systems like CowSwap and UniswapX find optimal execution across venues, applying reputation filters automatically.
• Automated Compliance: Vetting rules (e.g., 'only interact with audited protocols') are enforced programmatically, reducing human error.

Team and contributor history is opaque and unverifiable off-chain.

• Immutable Records: Store audit reports, contribution history, and KYC on Arweave.
• Portable Credentials: Use Ethereum Attestation Service (EAS) to create verifiable, composable reputation tokens that travel with users across dApps.

Due diligence fragments across isolated chains, creating blind spots and repeated work.

• Universal Messaging: LayerZero and Wormhole enable real-time synchronization of blacklists, exploit alerts, and reputation scores across 50+ chains.
• Unified Risk View: A protocol's composite risk score aggregates its footprint on Ethereum, Solana, and all integrated L2s.

Inadequate vetting leads to direct financial loss through exploits and predatory MEV.

• Pre-Execution Analysis: Automated systems scan for contract vulnerabilities and common MEV vectors before interaction.
• Economic Simulations: Stress-test tokenomics and incentive models against $100M+ attack scenarios using agent-based modeling.

Traditional KYC/AML and protocol audits are black boxes. No verifiable proof of work exists, creating liability gaps and enabling regulatory arbitrage.\n- Manual processes cost $50k-$500k+ per audit and take weeks to months.\n- Centralized databases are siloed, creating single points of failure and data breaches.

Infrastructure like Ethereum Attestation Service (EAS) and Verax enable cryptographically signed statements about any entity. This creates a public, immutable record of vetting actions.\n- Composable proofs: Attestations from Chainlink Proof of Reserve or Orao VRF can be bundled.\n- Sybil resistance: Platforms like Worldcoin or BrightID provide proof-of-personhood attestations.

A smart contract audit from 2022 is meaningless if the code was upgraded in 2023. Reputation decays. Current systems fail to provide continuous, real-time risk scoring based on live on-chain behavior and dependencies.

Protocols like UMA's Optimistic Oracle or Pythia can resolve queries about real-time protocol health. Autonomous agent networks (e.g., Ritual's infernet) can continuously monitor for rug pulls or governance attacks.\n- Programmable reputation: Scores adjust based on TVL changes, governance participation, and dependency risks.\n- Real-time alerts: Forta Network-style bots provide live threat detection.

Due diligence data lives in PDFs, spreadsheets, and private Discord channels. There's no standard schema to compare the security of Aave vs. Compound or the legitimacy of Project A vs. Project B. This stifles capital efficiency.

Tokenized Credentials (ERC-5840) and Attestation Schemas create a universal language for trust. This enables reputation markets where vetting can be crowdsourced and monetized.\n- Monetized diligence: Experts earn fees by staking on accurate attestations (see Karma3 Labs' OpenRank).\n- Automated compliance: Protocols like Mantle and Aevo can auto-whitelist wallets/contracts based on verifiable reputation scores.