The CertiK-YZi Labs $1M Partnership: A Catalyst for Institutional Trust in Web3 Startups

The Web3 ecosystem has long grappled with a paradox: while blockchain technology promises decentralization and innovation, its vulnerability to security breaches has deterred institutional investors. In 2025, total Web3 security losses surged by 37.06% year-on-year, reaching $3.35 billion, with phishing attacks alone accounting for 79% of December's $118 million in losses. Against this backdrop, CertiK and YZi Labs' $1 million partnership to bolster the security of early-stage startups in the EASY Residency incubation program has emerged as a pivotal development. By embedding advanced security protocols into the DNA of Web3 projects, the collaboration is not only addressing systemic risks but also reshaping institutional perceptions of the sector's viability.

A Strategic Shift: Security as a Foundational Investment

CertiK and YZi Labs' partnership introduces a $1 million audit grant for EASY Residency participants, offering Formal Verification, Skynet Boosting, and AI-powered vulnerability scanning. This initiative marks a departure from traditional incubation models, where security is often an afterthought. Instead, it positions security as a core component of project development, reducing the financial and technical barriers for startups in Web3, AI, and biotech. For institutional investors, this signals a critical shift: projects emerging from EASY Residency are now pre-vetted for vulnerabilities, mitigating the risk of costly breaches that have historically plagued the sector.

The partnership's impact is amplified by YZi Labs' role as a bridge between startups and CertiK's tools. By integrating these services into the incubation process, YZi ensures that participants like 42.space (a tokenized prediction market platform) and AllScale (a self-custodial neobank) are built with robust infrastructure from the outset according to the EASY Residency cohort. This proactive approach aligns with institutional demands for risk management, as evidenced by AllScale's recent $6.5 million funding round, which included backing from YZi Labs and Draper Dragon. Such investments underscore how security-first frameworks can attract capital, particularly in sectors where trust is paramount.

Institutional Confidence and the Broader Ecosystem

The partnership's influence extends beyond individual startups. By setting a new security benchmark, CertiK and YZi Labs are fostering a culture of resilience in the Web3 ecosystem. In 2025, while total losses rose, the number of security incidents declined in Q2, suggesting improved defensive measures. This trend is likely accelerated by initiatives like the EASY Residency program, which prioritizes security at scale. For institutional investors, the reduced frequency of breaches-coupled with CertiK's formal verification-aids in quantifying risk, making Web3 projects more palatable to traditional capital.

Moreover, the collaboration reflects a broader industry realignment. YZi Labs, now managing over $10 billion in assets, has positioned itself as a leader in incubating ventures with long-term value. Its strategic focus on security-paired with CertiK's technical expertise-creates a compelling narrative for investors wary of the sector's volatility. As Ella Zhang of YZi Labs noted, the partnership mirrors the role of a structural engineer in ensuring a skyscraper's earthquake resistance. This analogy resonates with institutional actors, who increasingly seek projects with defensible architectures.

Challenges and the Road Ahead

Despite these strides, challenges remain. The December 2025 data reveals that phishing attacks continue to dominate losses, highlighting the need for ongoing innovation in threat detection. CertiK's AI scanning services aim to address this by identifying social engineering vulnerabilities early, but their efficacy will depend on real-world adoption. Additionally, while the partnership has spurred trust, concrete metrics on funding increases or audit adoption rates post-2025 are still emerging.

Nevertheless, the partnership's long-term value lies in its ability to normalize security as a non-negotiable. By embedding CertiK's tools into the EASY Residency program, YZi Labs is not only supporting startups but also educating founders on best practices. This cultural shift-where security is prioritized from inception-could become a standard for the industry, further attracting institutional capital.

Conclusion

CertiK and YZi Labs' $1 million partnership represents more than a financial commitment; it is a strategic redefinition of how Web3 startups are built and evaluated. By addressing security at the incubation stage, the collaboration reduces institutional risk while fostering innovation in high-potential sectors like AI and biotech. As the Web3 ecosystem matures, initiatives like these will be critical in bridging the gap between technological promise and investor confidence. For institutions, the message is clear: security is no longer a peripheral concern-it is the bedrock of sustainable growth.