Smart contract audits are critical to the global blockchain ecosystem. Audits are routine checks that ensure smart contracts are as secure as possible before public deployment. Without an audit, a blockchain developer risks releasing an insecure platform hackers can exploit to steal funds and sensitive information.
This article will dive into contract audits, their importance and how they work.
What is a smart contract audit?
It is an extensive review of a contract’s codebase to identify security and operational vulnerabilities. It involves at least two experts examining every relevant line of code to identify security flaws based on their knowledge and experience. It also involves examining the code for errors that could hinder the blockchain app’s performance.
An audit is an indispensable part of the blockchain ecosystem. Auditing any decentralized application before its release is standard practice. Otherwise, you might release a bug-riddled platform and find it difficult to attract users.
Why are audits necessary?
Blockchain audits are necessary for the following reasons:
Safeguarding funds
Smart contracts let people transact according to preset rules, and any little bug can enable a malicious actor to rewrite the rules and steal funds. Audits are a preventative measure to identify and fix any such bugs before deploying the contract for public use.
Building trust
Most people are aware of the vulnerabilities of smart contracts and thus avoid unaudited blockchain apps like the plague. Any project without proof of an audit will hardly attract users or partners. An audit shows that blockchain security professionals have tested and certified your project, encouraging potential users and partners to transact with it.
Compliance
Audits are a standard requirement for complying with financial regulations. A formal audit lets you tick the compliance box and stay on the law’s good side.
Improving performance
Auditors usually review a platform’s codebase to find ways to improve its performance. For example, they can tweak the code to enable faster transactions with lower fees or make the user interface more accessible.
The process of a smart contract audit
An audit involves both automated and manual testing. Auditors run automated tests to detect errors that are easy to spot and manual tests to identify hard-to-spot errors. A good audit relies more on the manual than the automated side.
The process of a smart contract audit includes:
1. Initial review and documentation
The developer provides technical documentation about the contract, describing its design, purpose, and features to the auditors. This step sets the stage for an in-depth review.
2. Code freeze and review
The developer freezes the codebase and hands it over to the auditors. The auditors run automated tests to flag potential issues and use their knowledge to look for architectural flaws.
3. Security analysis
Auditors run security probes to find weak spots. They test the platform against known attack vectors and take note of any issues they find.
4. Manual testing
The auditors run a series of manual tests to see how the contract performs. This part is akin to a fire drill ensuring the app can remain resilient under unexpected conditions. Any identified flaws are duly documented.
5. Reporting
The auditor prepares a report detailing all the flaws they found during their review. The report describes the issues and the auditing firm’s recommendations for fixing them.
6. Fixing
The developer studies the report and implements the auditing team’s suggested fixes. They adjust the code to fix the vulnerabilities and make their contract as secure as possible.
7. Final review and seal of approval
The auditing team reviews the contract again to verify if the developer implemented their suggested fixes. If so, they prepare a report attesting that the contract has been audited by experts for vulnerabilities. The developer usually releases this report publicly to boost their reputation and user confidence.
Final Words
We have explained a smart contract, its importance, and how it works. At this point, you should understand the process enough to ensure your contract is audited effectively.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.