Blockchain technology is among the most innovative technological innovations of our time. Its open source and extremely secure capabilities have led to the explosion of DeFi-related apps and crypto-related projects. While blockchain technology is virtually impenetrable, its applications aren’t.

The majority of blockchain-based protocol functions on smart contracts that are susceptible to flaws in the code and code mistakes. Just one hacker attack to derail many months of development, and also the project’s reputation for ever.

It is possible to avoid this disaster by conducting the help of an outside Smart contract audit. This article focuses on the significance to conduct an audit on your smart contract’s smart feature.

What is a Smart Contract Audit?

The smart contract is the basis of the blockchain-based protocol. In order for the application to function smoothly, the contract needs been able to run without errors. Smart contract audits perform an exhaustive analysis of the contract’s source code. This helps developers discover potential weaknesses or flaws prior to deploying an intelligent contract.

In general, projects should depend on third-party auditors who will be able to check the development process thoroughly and objectively. The positive aspect is that new projects can rely on an experienced auditing of smart contracts for this job.

Prices for audits of smart contracts differ dependent on the type of project or service you select. But, the benefits far exceed the risks associated with deploying the wrong smart contract that is not compatible with blockchain.

Why Smart Contract Audits are Important

Making a smart contract on the blockchain without having audited it is risky. In the first place, once you’ve deployed it, it is impossible to modify the code. If the code is flawed or is not properly coded, the data could be vulnerable to attacks by hackers. That means your application could be at the possibility of data theft. Using Oil Profit to automate your crypto trades can help in eliminating emotional trading, thus allowing you to see the bigger picture.

Today, hacking smart contracts is a common occurrence in the world of crypto. Hackers are always on the watch for issues with the code and human mistakes. If they can find and exploit a vulnerability they are able to escape by stealing millions of data and cryptocurrency.

Famous Smart Contract Hacks

One example of the importance in smart contracting is the theft of 3 million dollars from the DeFi Protocol Cover in 2022. A hacker then discovered that the protocol was vulnerable to an infinity mining flaw. He decided to invest an enormous amount of money before withdrawing the money and the gains. He repeated the steps several times in order to earn gains the method could not last.

Luckily the Cover attacker was an actual White Hat hacker, who was able to return the money. The attacker hoped to prove the smart contract they had created was not working as it should. But not all incidents are as heart-warming. Some less well-known incidents include:

  • dForce losing nearly $25 million in April 2020.
  • KuCoin Exchange losing $280 million in September 2020
  • Harvest Finance lost nearly $20 million in October of 2020.
  • Pickle Finance losing $19 million in November 2020

The list continues and may include nearly every project that utilizes any un-audited smart contracts.

In the history of blockchain 2020 is likely to be an important year that saw the most hacker attacks against smart contracts. This is because these incidents prompted the appearance of several experts auditing firms for smart contracts. In the end, as experience shows that an increased auditing service and their use has lowered the effectiveness of these attacks.

These days, they’re considering a smart contract audit prior to deployment. This is mandatory. However, this audit should be conducted through the eyes of an auditor from a third party. The reason is that the developers of the project might find it difficult to come up with solutions for their vulnerabilities in code. In addition an external audit can increase the confidence of the users more than an internal audit.

How a Smart Contract Audit Works

The threat of hacking is an adequate reason for any project to go for auditing of smart contracts by an external company. But security isn’t the sole reason. Developers must also consider the advantages for users to utilize their software.

The process of creating and setting up a smart contract for developers who are new to the field may appear easy initially. But, one of the biggest issues they will face are optimizing gas. This is the price that users must pay for the use of the smart contract. In the event that, for instance, the contract is not optimized properly it will require users to pay significant amounts, which are greater than any potential gain. This means that they may decide to abandon the project entirely.

Auditing can be a complicated process However, it can in preventing and resolving these issues. This is how it works!

Step 1 – The Project Developers and the Auditors Agree on a Scope of Work

The audited party supplies the auditor with all needed information about the project as well as its digital contract number.

Step 2 – The Auditor Collects Code Design Models

The auditor scrutinizes the code and scrutinizes the structure to ensure proper integration of smart contracts from third parties.

Step 3 – In-Depth Testing

The auditor examines each of the functions of the smart contract. The experts examine all possible uses and weaknesses that could compromise the contract in this manner.

Step 4 – Manual Analysis

The auditors scrutinize the smart contract thoroughly and code line-by-line. In this way, they can identify any vulnerabilities or risks that could be present.

Step 5 – Initial Report

The auditors prepare an initial report on their findings. They also identify any weaknesses.

Step 6 – Fixing Errors

Auditors offer solutions for every bug or mistake they identified in the initial report.

Step 7 – Final Audit Report

After addressing any potential weaknesses The auditors then confirm the validity of the smart contract’s security. In addition, they issue the successful audit certificate. This document helps the project to demonstrate its reliability and credibility to investors and customers.

Final Thoughts

It’s important to remember it’s the standard procedure for an audit of a smart contract. However, the standards and procedures will differ based on the tool or auditor you decide to employ. In addition, this field is in the process of being developed. So, it is possible that it will be altered based on technological advances and market demands.

Yet, a smart-contract audit is essential for any new venture that wants to go successful on the blockchain. This method can drastically decrease the chances of having an ineffective or flawed protocol. If you’re in search of an expert audit of your smart contract You can depend on the top auditors including Chainsulting, Solidproof CertiK, Chainsulting or the OpenZeppelin.

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