Almanax is the New York-based startup specializing in security solutions for the Web3 that uses artificial intelligence to prevent hacks on the blockchain.
“The blockchain is secure as a decentralized ledger, it is very difficult today for there to be an attack that changes the amount of money stored in the wallets, but there are often attacks on applications launched on the blockchain. These occur when hackers gain access to private keys or find vulnerabilities in blockchain application code that they use to attack not the underlying infrastructure but the application layer. That’s where a large proportion of hacks happen and that’s the layer we focus on,” Francesco Piccoli, who of Almanax is CEO and co-founder along with Maxwell Watson (CTO), tells Startupbusiness.
Almanax has secured an initial $50,000 pre-seed investment from Defy.vc, a San Francisco-based venture capital vehicle run by former founders who have also made major exits in the U.S. With a total asset value under management of $700 million, the startup has also been selected by Nvidia to participate in its Inception Program, a program that supports startups that revolutionize industries with significant technological advances.
Almanax’s mission is to prevent catastrophic cryptocurrency losses. “At Almanax, we believe that the full potential of web3 can only be realized with a solid cybersecurity foundation. While a cyber attack in the traditional financial world steals customer information that hackers can use to demand a monetary ransom, an attack in web3 is much more direct, as the money is present directly at the IT protocol level. This means that once the attack is carried out, the money is directly stolen, and transactions cannot be undone. Hence the need for even stronger security than in the traditional financial world, made possible today by recent advances in AI.”
Smart contracts are lines of computer code that are the beating heart of a blockchain application. Historically, they have been a favorite point of attack for cybercriminals. To defend themselves, companies launching products in web3 contract cybersecurity firms to conduct what is known as an audit of their smart contract in order to find and fix these vulnerabilities. “Our first product addresses the urgent problems of security audits, which are extremely expensive, time-consuming and often ineffective in the Web3 space. Using state-of-the-art artificial intelligence algorithms, including Large Language Models (LLM), Almanax provides automated audits of smart contracts, finding vulnerabilities in them before hackers do.”
This offers blockchain developers detailed vulnerability scanning and security resolutions in seconds, dramatically improving current security practices. The benefits of Almanax’s tool address industry pain points: cost reduction, traditional audits can be prohibitively expensive, often hovering in the tens to hundreds of thousands of dollars, making security unaffordable for many projects; reduced wait times, high demand for qualified blockchain security experts has created long waiting lists, sometimes as long as 8 months, which can delay project development and launch; time limitation, conventional audits offer only a static snapshot in time, not providing a guarantee of continuous security after launch; ineffectiveness, humans often make mistakes. 91% of smart contracts that suffered hacks in 2022 had at least one audit, leading to losses in excess of $2 billion; redundancy, it is usual for projects to face numerous manual audits during development to get second opinions, exacerbating all of the aforementioned pain points.
An astonishing amount of money, amounting to about $9 billion has been stolen using Web3 vulnerabilities in the past 3 years. Causes range from smart contract exploits to phishing schemes and wallet compromise. The hacking of Ripple co-founder Chris Larsen’s personal wallets, resulting in the theft of more than $112 million in XRP, and the $197 million attack on Euler Finance stand to show how high the risk of vulnerabilities is in today’s digital asset landscape.
The founders of Almanax bring extensive experience in web3, AI and cybersecurity. Piccoli was the head of product at AnChain.AI, where he developed products to investigate multimillion-dollar hacks for the SEC, the U.S. Treasury Department, and the Italian State Police. Prior to AnChain, the startup CEO conducted research in artificial intelligence with Ripple and worked on autonomous driving research with Volvo Cars. Watson, a former software engineer at Coinbase, led the company’s blockchain infrastructure projects. Previously, he developed Capsule8’s security products that led to its acquisition by cybersecurity giant Sophos.
“We will launch the beta phase of the product in the next two weeks, so before the end of June 2024 , we will be active both in the U.S. and the rest of the world, the solution will be offered in b2b Saas mode to blockchain code developers and companies using blockchain-based solutions and smart contracts. We do this using AI algorithms that we are finalizing to train to respond specifically to the functionality that we need and thus to the problems we want to solve.” Problems that are bound to be increasingly prevalent as more and more organizations around the world, such as banks, are adopting blockchain-based smart contracts. “Today we are finalizing the beta of the product and we are working to grow the team, we already have 4 people on board in addition to the two co-founders including a machine learning scientist coming from Uber and we have recently opened 4 new positions for which we have already received thousands of applications, it is still early to define international expansion plans even with offices but I certainly do not exclude that I would like to have an office in Italy as well.”
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