Phylax Systems Raises a $4.5mm Pre-Seed to back Credible Security

October 31, 2024

Phylax Systems has raised a $4.5M pre-seed to develop The Credible Layer, a proactive hack prevention protocol aimed at solving crypto’s security challenges.

Nascent and Figment Capital co-led the round with support from Robot Ventures, Hash3, Bankless Ventures, Breed VC, and Public Works. Many amazing angels are also joining the Phylax journey: Banteg, Hari Mulackal, Laurence Day, Ryan Lackey, Nic Carter, Nader Dabit, Eric Wall, and a host of other fantastic folks. Also a huge thank you to Ekram Ahmed, our brand advisor.

How did we get here? Just over 2 years ago, my life changed. I was a protocol engineer at Nomad and we got hacked for $190mm. I woke up to see everything I had helped build, gone.

After the hack, I talked with affected users, as well as other DeFi founders and engineers and what I discovered was frightening. 

Many of them don’t sleep for fear of being hacked, and many of them quit the space because of it. We aren’t just losing the best builders to hacks, we are losing them to the fear of hacks. These experiences and interactions compounded to the point where I knew I was going to do something about this issue.  To say the least, it was a formative experience that has stuck with me and provided the motivation to build what became Phylax Systems. 

Our Industry Needs Help

At this point, it’s obvious that one of the primary hurdles to adoption en masse is the billions of dollars of hacks that occur every year. Next block mitigation and frontrunning are steps in the right direction, but ultimately they can be circumvented and gamed. We need something absolute.

As our industry matures, we must prepare our infrastructure for mass adoption. Yet without reliable security, all other efforts fall short—users need the assurance that their assets are safe. For the average user, security matters far more than transaction speed. A truly secure network will spark a flywheel effect, drawing in more capital, users, and applications. Security isn’t just a necessity; it’s now an opportunity to stand out in an increasingly crowded market.

“Security is the most important area for improvement in DeFi. To truly become the foundation for global financial infrastructure, the solution can’t just be more audits and faster alerts when things go wrong. Phylax is the first credible approach we’ve seen that provides proactive assurances around the safety of protocols and the funds entrusted to them.”
Nascent Capital

What we are building

We are building the Credible Layer, a security layer that will enable dApps to define what a hack looks like for their app and communicate these assertions to the block builder, explicitly asserting which states they never want to occur. The assertion enforcer will then check each transaction against each assertion for the dApp, proactively preventing transactions that conflict with the predefined rules.

The Credible Layer is transparent—anyone can see the defined security rules for a dApp and verify that they’ve been enforced. To support this added security, dApps will pay fees in exchange for validation that safeguards their state. This approach offers a robust, proactive solution to preventing hacks, rather than reacting after an exploit has occurred.

This will provide the industry with a security solution that is absolute in its ability to prevent hacks.

Some may question the reliance on trusted entities to enforce these rules. However, this model builds on the trust assumptions that already underpin much of blockchain infrastructure; for example, a small number of entities currently support over 90% of Ethereum’s block production. We’re not advocating for increased centralization just creating new security mechanisms on top of existing, industry-tested trust structures.

By enabling dApps to establish their own transaction rules directly in the block validation process, the Credible Layer offers a faster, more proactive approach to maintaining security.

Read more about the Credible Layer in our recently release whitepaper.

Why Security Matters

Regulators have scrutinized our industry due to high-profile hacks, and while their intentions may not always be entirely impartial and fair, this particular concern is valid. Incidents like the recent $53MM Radiant hack underscore just how far we still have to go. It’s up to us as an industry, to prioritize security in our designs, our products, and how we position ourselves to users—it can no longer be secondary.

As Nic Carter from Castle Island Ventures said:
“We’re long overdue for moving DeFi hack mitigation from reactive to proactive, and Phylax is leading the charge.”

What’s Next

At Phylax, we are rapidly executing on our ambitious roadmap and growing the team to accelerate our progress. We pride ourselves on being small and nimble with a singular goal of solving security - no distractions. The Credible Layer is only the first product on a much larger roadmap to secure this industry. Apply here to work at Phylax Systems.

If you want to explore the Credible Layer and are a DApp, SR, network, or a generally interested party, please fill out this short form, and we will be in touch. 

We envision a future where the Credible Layer’s network of security researchers, dApps, networks, and assertion enforcers are proactively enabling users to deploy capital into our industry with confidence.