Why Are Smart Contract Security Audits So Important?
Smart contracts’ adoption has been on the increase given its displacement of the traditional method involved in a legal document by relying on a decentralized computing system known as the blockchain.
While smart contracts have made agreements easier and more secure, only a few developers and users are aware that there is a need for periodic security audits of smart contracts to exterminate bugs and errors.
Smart contract security audit refers to a thorough assessment of smart contract sets. Regular conduct of smart contract audits is very important as it enhances the early identification of vulnerabilities.
Similarly, periodic audits of smart contracts reveal the reliability and dependability of the contract regarding the positions of the parties involved. Below are major reasons why you must not joke with smart contract review or audit.
Importance of Smart Contract audit
Even though standard smart contracts are developed with a high level of security and code quality, there are still cases of ransomware attacks by hackers. To prevent this incident, smart contract audits should be held in high regard.
More than any other time, cybersecurity should be given priority in the decentralized finance (DeFi) space because of the relentless acts of malicious hackers.
A number of DeFi projects have recorded huge losses as a result of vulnerabilities in their smart contracts being explored by hackers.
For instance, an on-chain synthetic asset platform running on Ethereum, Synthetic, lost 37 million synthetic Ether (sETH) due to smart contract vulnerabilities. In the same vein, an Ethereum based DeFi project, bZx, lost $645,000 due to bugs in its smart contract, and many others.
What the foregoing reveals is that a small bug in smart contract logic or set-up can lead to the total loss of your investment. Hence, smart contract security audits should be regularly carried out for safety and security reasons.
How To Execute Smart Contract Security Audit
Executing smart contract security audits involves a number of processes. Firstly, review if the functionality of the contract still tallies with its description in the whitepaper. This will enable you to identify if there has been an unauthorized action on the smart contract.
Also, double-check the smart contract vis-a-vis the standard list of vulnerabilities. Appropriate defense mechanisms should be prepared ahead of the most recent ones.
However, carry out static analysis by making use of automated tools such as gas usage analysis, symbolic analysis, unit tests, among others.
What Are the Smart Contract Audit Approaches?
There are two major approaches to smart contract security audits, namely; manual and automatic smart contract analyses.
Manual Smart Contract Security Analysis
This is often described as a traditional method of conducting smart contract security audits because it is slow compared to automatic analysis.
A manual code analysis refers to the assessment of each code line by a professional developer. In this regard, the code review will be done alongside the list of standard vulnerabilities.
This method is more systematic and thorough because the codes are examined one after the other. As a result, there is a high tendency that hidden problems will be detected.
Automatic Smart Contract Security Analysis
The automatic analysis runs on modern software for detecting bugs and errors in smart contracts. It is a faster process of checking vulnerabilities.
Under this method, the bug detection software helps to identify the possible error by examining each part alongside the allocated functions.
One of the commonest automatic tools for analysis is Mythrill. Mythrill is regarded as a reliable software for contract security analysis. Another relevant software is Sithler which is a python-based software.