Smart Contract Audit: Process & Why it is important

Smart Contract Audit: Process & Why it is important | OmiSoft

Smart contract vulnerabilities

As an innovative technology, smart contracts have key benefits, such as transparency, efficiency, cost reduction, and security, which have been applied in various business areas.

At the same time, security issues have been reported confining substantial financial losses.

Smart contract bugs let a large number of attackers drain the project’s funds.

Crypto investors have been hit hard this year by hacks and scams with losses in the hundreds of millions of dollars. 

Also, these potential security weaknesses can be exploited by cybercriminals to exposure customer data. Therefore the need for a blockchain advisory to provide a safety shield to your project is essential.

This is Disneyland for hackers

According to blockchain analytics firm Chainalysis, security breaches have led to nearly $1.4 billion being stolen through the first half of 2022.

Notably, most of these attacks were conducted on Ethereum and Solana blockchains.

One of the largest crypto hack cases this year is Wormhole with $325 million lost. The hacker found an exploit in Wormhole’s smart contract code that allowed to mint 120,000 Wrapped Ethereum on Solana. Then a hacker stole around $625 million from the Ronin blockchain, which underlies the Axie Infinity crypto game. Unfortunately, news about cyberattacks never stops to appear.

Obviously, not only mature companies are under the risk. To prevent such situations, start-ups and medium size companies should pay attention on smart contract audit consulting from the very first steps of growing.

What is a Smart Contract Security Audit

Auditing a smart contract aims to discover errors, issues, and security vulnerabilities in the code in order to suggest improvements and ways to fix them.

In simple words, it’s a thorough analysis of the code to identify any weaknesses and vulnerabilities.

Audit smart contracts are conducted using a combination of manual and automated tools, such checks include both running tests and manual code analysis.

Smart code audit before deploying a smart contract is crucial, as once written in the blockchain, the code cannot be changed.

Main reasons why the smart contract security audit becomes an essential requirement:

  • Better code optimization
  • Improved performance of smart contracts
  • Enhanced security of applications
  • Increasing wallet security
  • Security against hacks and thefts

The audits are conducted in a four-step process:

 

Specification review & Testing

During this phase, blockchain consultant aims to collect maximum client data in the required format for objective assessment.

Auditors collect code specifications and examine the architecture. This helps blockchain advisors understand the goals of the project and determine its scope.

This stage involves composing a smart contracts specification agreement.

 

Security audit

Smart contract security auditing implies reviewing every line of code and creating test cases to apply them in all possible penetration scenarios.

There are several options for conducting tests:

–   Automated analysis ( The automated analysis tools could evaluate a program for determining the inputs which trigger the execution of each part of the program.  These tools for Solidity are presently in the early stages of development)

–   Manual analysis (Manual inspection is a necessary requirement for improving the detection of possible smart contract code vulnerabilities. An experienced auditing team evaluates any specification to confirm the performance of a project according to desired functionalities)

Blockchain consulting company can offer reliable recommendations for improvement to the project team.

 

Gas usage audit

With gas fees on networks like Eth, efficient contracts can save a significant amount of money on transaction costs and optimize project development costs in general.

When gas prices are high, smart contracts may fail to execute, which is exacerbated when a low gas limit is used.

Smart contract audit company considers this type of optimization as well.

 

Report

After the audit is completed, the auditing team issues a final report that includes detected bugs, recommendations for fixing, and necessary changes to upgrade security.

Some blockchain consulting companies have a team of experts to help fix every bug that is found.

So, in a nutshell, smart contract audits can be quite helpful for:

  • Decentralized apps product owners
  • Individuals who have to gain the trust of investors, stakeholders, contributors, etc.
  • Creators and organizers of ICO startups
  • Smart contract developers

The Bottom Line

Smart contract audits, fortunately for investors and users, have become the gold standard.

A number of recent events have shown that auditing of smart contract security has to become a vital part of project deployment & launch.

As always, to see the bigger picture, the best option is to take professional help from certified security auditors and hire blockchain consultants, who can easily do the job for you so you focus on the business side.

Feel free to book a free consultation in order to get further details.

Our experienced team can help you get your smart contract or blockchain platform audit done without any hassle.

Contact us and our experts will take care of your cybersecurity!

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