Executive Summary
Paxos, a regulated blockchain infrastructure and tokenization platform, develops stablecoin products and infrastructure for institutional and enterprise use. As it expanded stablecoin capabilities across additional Layer 1 and Layer 2 networks, Paxos needed to evaluate chain-specific architecture, securely implement critical issuance and control logic, and independently assess each reviewed release before deployment. Since 2023, CertiK has supported these initiatives through architecture evaluation, development-stage security review, smart contract audits, and penetration testing. Across multiple engagements, the collaboration helped Paxos address identified risks earlier and establish a repeatable security process for subsequent product updates and network expansions.
Key Challenges
Selecting Architectures for Multi-Chain Deployment
Extending stablecoin infrastructure to a new blockchain involves more than comparing transaction speed and cost. Each network introduces different assumptions around finality, upgradeability, decentralization, smart contract architecture, external dependencies, and operational control.
These differences can affect how issuance, redemption, settlement, and privileged actions should be implemented. Decisions made at this stage may also create long-term development and operating constraints that are difficult to reverse after deployment.
Paxos therefore needed security input before implementation,not only a review of the completed contracts,to evaluate how each network’s architecture would affect its intended stablecoin controls.
Securing Critical Stablecoin Logic Without Slowing Development
Paxos’s stablecoin infrastructure included sensitive functionality such as issuance and redemption, rebasing, settlement, proxy upgrades, privileged administration, and cross-chain operations.
A permission or business-logic error in these components could affect token supply, interrupt core operations, or produce inconsistent behavior across networks. Because many of these risks originate in design decisions, relying solely on a final-stage audit could leave limited time for architectural changes without disrupting the release schedule.
The engineering team needed a process that could identify risks during development while preserving an independent validation stage before deployment.
Maintaining Consistent Assurance Across Multiple Releases
Each contract update, new product, or network deployment can introduce different trust assumptions and attack surfaces. Treating every engagement as an isolated audit would require repeated discovery and make it harder to carry architectural knowledge from one project to the next.
Paxos needed a security model that could retain context across engagements, adapt the assessment to each release, and produce evidence for internal governance and relevant external diligence.
CertiK’s Solution
Evaluating Security Trade-Offs Before Implementation
CertiK assessed blockchain environments including Ethereum, Arbitrum, and TON across their security models, architecture, performance characteristics, and operational implications.
The evaluation focused on how network-level differences could affect Paxos’s stablecoin infrastructure, including privileged controls, upgrade mechanisms, settlement behavior, and external dependencies. This allowed security considerations to inform network selection and system design before substantial development resources were committed.
By evaluating architecture before the code was final, CertiK extended the engagement beyond the scope of a conventional pre-deployment audit and helped reduce the risk of late architectural rework.
Integrating Security Review into the Development Process
CertiK worked with Paxos’s engineering team throughout development, reviewing architecture and implementation decisions as the relevant components evolved.
The reviews examined sensitive stablecoin functionality while changes could still be incorporated efficiently. Interim feedback allowed Paxos to address identified design and implementation risks before the final assessment stage rather than allowing them to become late release blockers.
This model combined two normally separate functions: collaborative security input during development and independent assessment of the completed implementation. It gave Paxos access to ongoing security context without removing the need for formal pre-deployment validation.
Providing Independent Assessment and Remediation Verification
CertiK conducted smart contract audits and penetration testing across the systems and releases included in the respective engagements. Assessment coverage was adapted to the project, including relevant business logic, permissions, upgrade mechanisms, dependencies, and supporting infrastructure.
When findings were identified, CertiK provided remediation guidance and reviewed the affected changes. This helped distinguish between recommendations, client-implemented fixes, and independently verified remediation.
Because CertiK supported multiple related initiatives, later engagements could build on established knowledge of Paxos’s architecture and control requirements. Researchers could focus more quickly on changed functionality and network-specific risks instead of repeating foundational discovery for every project.
Value Delivered
Earlier Risk Identification
Introducing security review during architecture selection and development allowed Paxos to address certain risks before the final audit stage. This reduced the likelihood that identified design and implementation issues would reach production or require disruptive late-stage changes.
Independent Assurance for Reviewed Releases
The audits and penetration tests provided independent assessment of the stablecoin components and supporting systems included in each engagement. The resulting reports documented scope, findings, remediation status, and verification results for internal governance and relevant external diligence.
These assessments supported Paxos’s security and compliance-readiness processes but did not constitute a determination of complete legal or regulatory compliance.
A More Repeatable Security Process
The collaboration established reusable knowledge and review practices that could be carried into subsequent product updates and network expansions. Retaining architectural context reduced repeated discovery work and allowed later assessments to focus on new code, changed dependencies, and network-specific risk assumptions.
The result was a more scalable approach to recurring stablecoin development: security input could begin earlier, formal assurance remained independent, and lessons from one engagement could inform the next.
Expanding Stablecoin Infrastructure Across New Networks?
CertiK supports stablecoin issuers from early architecture evaluation and development-stage security review through independent auditing, penetration testing, remediation, and deployment assurance.
