How Cicada Selects and Audits Assets

Cicada generates revenue primarily from three distinct asset categories, collectively referred to as Real Yield Assets (RYA): Real World Assets (RWA), crypto-native assets, and semi-centralized DeFi assets. Semi-centralized DeFi assets are defined by their hybrid structure, combining real-world organizational entities with benefits expressed through decentralized frameworks.

To ensure transparency and verifiable returns across these diverse asset classes, Cicada implements a robust, multi-layered auditing framework that integrates on-chain verification, oracle-based validation, and traditional financial reporting methodologies.

1. Crypto-Native Assets

For crypto-native assets, such as Protocol Yield, the fully on-chain, transparent, and open-source nature facilitates seamless verification via blockchain explorers. This enables real-time traceability and a clear audit trail, providing stakeholders with immediate, reliable access to performance data.

2. Centralized Strategic Assets

Centralized strategic assets, which involve cryptocurrency trading strategies with centralized entities, present unique auditing challenges due to potential opacity in operational logic (often termed "black-box" operations), delayed performance reporting, and information asymmetry. To address these, Cicada engages specialized cryptographic auditing firms to conduct rigorous assessments, incorporating due diligence processes aligned with traditional finance standards. Regular, detailed audit reports are issued to enhance transparency and foster trust among stakeholders.

3. Real World Assets (RWA)

For RWAs, Cicada employs a comprehensive three-stage auditing process to ensure accuracy and compliance:

• Stage 1: Offline Audit – A traditional audit verifies compliance through meticulous due diligence, ensuring underlying assets meet regulatory and quality standards.

• Stage 2: On-Chain Verification – Advanced mechanisms, such as oracles and verification nodes, validate the authenticity and accuracy of the off-chain to on-chain mapping, ensuring integrity in the digital representation of assets.

• Stage 3: On-Chain Audit – This examines blockchain-specific attributes of tokenized assets, confirming their proper functionality within the blockchain ecosystem.

Compared to the auditing of crypto-native and centralized strategic assets, RWA auditing introduces an additional layer of complexity to ensure precise asset mapping. This rigorous process upholds the highest standards of transparency, accuracy, and accountability across all CeDeFi asset categories, reinforcing Cicada’s commitment to trust and reliability.