Seven Answers to the Most Frequently Asked Questions About Smart Contract Audit
Smart contracts allow for decentralized transactions and greater transparency. These contracts are a necessary part of cryptocurrency development.
Unfortunately, it only takes a single bug to bring down the entire contract. A smart contract audit helps detect vulnerabilities, ensuring stable coin development.
Before requesting an audit, you may want to learn more about the auditing process and its benefits. Here are seven answers to the most frequently asked questions about smart contract audit.
1. What Is a Smart Contract Audit?
A smart contract audit includes a detailed analysis of the code to detect coding errors, security flaws, and other issues that may result in irreversible damages.
Smart contract audit development companies examine your contract and provide recommendations based on their findings. The process includes automated and manual testing to uncover common and rare technical and security issues.
Malicious individuals look for patterns and flaws to exploit, giving them access to the funds exchanged through the contract. In one example, the Decentralized Autonomous Organization (DOA) lost $50 million due to security exploits. Besides protecting against these threats, the audit often provides the verification needed to begin trading a new token on an exchange.
2. What Are the Benefits of a Smart Contract Audit?
An audit gives your organization a way to uncover potential security risks.
The audit process helps uncover security flaws and bugs before you deploy the smart contract. After deployment, you cannot fix these mistakes. You may even risk losing money.
With an audit, you ensure that your smart contract is safe and ready for use. Preventing any possible risks also gives more confidence to your investors and protects against malicious attacks.
3. What Are the Vulnerabilities of a Smart Contract?
The most common types of smart contract attacks and security flaws include:
- Reentry attacks
- Integer overflow and underflow
- Timestamp dependence
- Denial of service (DoS) attacks
These issues may crash your contract or allow hackers to steal money. It only takes a single bug or vulnerability to cause irreversible financial loss. Besides the loss of funds, your organization may suffer from a loss of trust from investors or clients.
4. How Long Does the Audit Take?
The duration of the audit varies depending on several factors. Simple token contracts may only require several days of testing and verification. Complex projects, such as a decentralized crypto exchange, may take several weeks or a month.
You should plan for the audit in your smart contract development lifecycle. When scheduling a release date, account for the auditing process and additional time to implement any changes based on the audit security report.
5. What Does the Smart Contract Audit Include?
With blockchain proof of concept services, the auditing process covers several steps, including:
- Independent assessment
- Verification process
- Detailed testing
- Comprehensive reporting
During the unbiased assessment, staff search for technical and security flaws and bugs in your blockchain proof of concept. The verification process ensures that the contract meets any specifications or requirements.
After the completion of the first two phases, you receive suggestions for improving the code. With the changes implemented, the team re-verifies the contract to check for any anomalies or glitches.
The final phase includes reporting. You receive an in-depth report detailing the results of the audit, including the flaws discovered during testing.
6. What Is an Automated Smart Contract Audit?
Audits include automated or manual analysis. Both options provide advantages and drawbacks. With the automated process, advanced software and tools run your code and help to find common vulnerabilities.
The drawback to the automated process is the risk of a false positive and the inability to detect some of the more complex security flaws. However, automated analysis frees up time and resources, allowing human auditors to manually review the code for additional vulnerabilities.
7. Who Should Consider Getting an Audit?
Any startup or existing organization involved in Ethereum development or decentralized exchange development should have their code audited.
While the blockchain remains secure, the applications that interact with your smart contract can expose vulnerabilities in the code.
If your next project involves digital wallet development, real estate tokenization, or any other types of decentralized asset tokens, use an audit to protect yourself from bugs and malicious attacks. Schedule an audit before completing your cryptocurrency or EOS development process.
Ish Goel established the ‘Blockchain Centre of Excellence’ at Somish in 2016. Through the Somish Group, he has worked with the Government, Real Estate, BFSI, Manufacturing, Retail, Agriculture and Logistics industry over the past one decade.
Ish is one of the key blockchain architects at Somish and has led delivery of multiple blockchain products using platforms like Ethereum and Hyperledger globally. Key product offerings include: DEF (Data Exchange Framework powered by blockchain, getdef.io), GovBlocks (Decision Making Protocol, govblocks.io) and Certy (Issue Certificates on Blockchain, certy.io)