What is a Smart Contract Security Audit?

As blockchain technology emerged in the past few years, smart contracts have become an important part of the blockchain ecosystem. After that, smart contract auditing becomes essential for using smart contracts because if the smart contract has vulnerabilities, users can lose their hard-earned money. This is the main reason why smart contract security audits are required.

In this article, you will learn what a smart contract security audit is, why it is important, how to audit smart contract, the cost of auditing smart contracts, and the tools for smart contract auditing.

What is a Smart Contract Security Audit?

A smart contract security audit is a comprehensive evaluation of the code and the underlying architecture of a smart contract. It is performed by security experts to identify potential vulnerabilities, security risks, and other issues that could affect the contract's functionality, integrity, and security. 

The goal is to ensure that the contract functions as intended, with no unplanned consequences, and is secure from potential attacks or hacking. A smart contract audit on blockchain accurately analyzes smart contracts. 

There are two common approaches to smart contract security audits:

• Automated smart contract audits

The primary purpose of opting for automated audits is to reduce the chance of human errors. Moreover, you can employ automated smart contract audits for projects where you need a quicker time to market because automation makes it faster to find weaknesses. Automated audits, however, may fail to understand the context of the audit and, thus, may exclude some vulnerabilities.

• Manual smart contract audits

Manual audits, as the name suggests, consist of human efforts where a team of auditors works on the smart contracts. The primary focus of these efforts is to find out the issues with re-entry or compilation. Moreover, human efforts also focus on security issues that are otherwise undermined, like insufficient encryption.

Why are Smart Contract Security Audits Important?

As per the chainalysis, 2022 is the biggest year for crypto hacking, and around $3.8 billion was stolen. Hackers can find breaches in smart contracts, and it makes it easy to steal funds from the platform. Also, if the smart contract is deployed on blockchain, changing the smart contract is hard, so it is essential to do a smart contract security audit before the deployment.

Therefore, businesses are more concerned about deploying smart contracts without a security audit. Due to some errors in smart contracts, businesses can lose funds and assets. That's why a smart contract security audit is necessary for the business.

Here are some other reasons why smart contract audits are necessary:.

• Avoiding costly errors

If you audit your smart contract in the early development stage, you can avoid potential future threats after the launch. and you can save your funds from hacking.

• Review from the expert

This expert reviews your smart contract twice to make sure it has no errors. and these experts are independent from business, so they check the code unbiasedly and audit contracts for functionality and security.

• Enhance security 

After doing a smart contract security audit, the business owner can be assured that their code is secure. This also builds confidence in users and investors.

The Smart Contract Security Audit Process

A smart contract security audit can be done with many different tools and techniques to find errors. And make smart contracts more secure. Different auditors follow different auditing processes. Here is the general smart contract process.

1. Require Data Gathering

During the first stage, submit all the technical documents to the smart contract auditor. These may include codebases, whitepapers, and any other relevant document regarding smart contracts. This document helps auditors understand the project's objectives and functionality.

2. Automatic Testing

After the first step, when auditors gain an understanding of the project, they test the contract with smart contract auditing tools (e.g., MythX, Slither). Testing smart contracts with tools is the easiest method to find the error. Auditors do static and dynamic analysis to find potential threats. After this step, the auditor will move on to the next step, which is manual testing.

3. Manual Testing

After finding vulnerabilities through automatic testing, manual testing is required because tools can never understand what blockchain developers want to achieve with their applications. After auditing the code and understanding how the code is written, the auditor can find vulnerabilities that the automatic test misses.

4. Resolve the Issue

After the auditor finds the vulnerabilities in the code, they work with your team to resolve the issue in the code. This whole process can take time and the efforts of the team, but it is the most important part of the project. Before you deploy your smart contract, make sure you have enough time to do a security audit. Now that all issues are fixed, you can deploy your smart contract.

5. Final Audit Reporting

The last step of the auditing process is the final reporting. The auditor now prepares the final report, which includes details of the issue, whether it is resolved or not, and the final status of your smart contract. 

How Much Does a Smart Contract Audit cost?

The cost of a smart contract is based on different factors, such as the complexity of your smart contract, the scope of the audit, which firm you hire for the audit, how much time you need to audit, and the depth of the audit.

Typically, the cost of a basic audit is around a thousand to five thousand dollars; the standard audit price is between five thousand and twenty thousand dollars. This covers an in-depth analysis of your code, a detailed report, and how to resolve the issue. Some firms offer on-going support throughout your project and re-auditing of contracts to reduce their overall costs. 

Investing in smart contract security audits is necessary for the future safety of your application. This audit can build trust in your users that their money is safe from hacking or other breaches. While you budget your smart contract audit, consider these factors and make a wise decision. By doing this, you can get a budget-friendly smart contract security audit.

Tools Used for Smart Contract Security Audits

There are many tools available on the market to audit your smart contract, and each tool offers a different analysis to find issues in your smart contract. Here's a list of some popular smart contract audit tools.

1) Slither

Slither is a static analysis tool to find vulnerabilities in Solidity code. It can detect more than 92 types of different vulnerabilities.

2) MythX 

MythX is a popular auditing tool that supports both Solidity and Vyper contracts. Also, these tools use both static and dynamic analysis to find bugs and vulnerabilities.

3) Manticore

Manticore offers only dynamic analysis that performs testing of the Ethereum smart contract. Manticore also supports executable code, as well as Solidity and Vyper Contract.

4) Securify 

The Securify tool can detect issues in both Solidity and EVM bytecode. This tool can identify more than 180 security vulnerabilities and provide a detailed and easy-to-understand report.

5) MAIAN 

The MAIAN tool can perform automated analysis of EVM bytecode. There are many features, including a deflection interface and automated gas analysis.

6) Oyente 

Oyente is a popular smart contract audit tool that performs static analysis to find bugs in Ethereum smart contracts. This tool uses symbolic execution to find potential bugs.

Conclusion

A smart contract security audit is necessary for your project to identify potential threats and bugs in the code to improve security and reliability. By understanding the process, the importance of smart contract security audits, and the types of vulnerabilities, businesses can protect their assets. Businesses can avoid costly mistakes and vulnerabilities by adopting best practices in smart contract auditing.