What is A Smart Contract Security Audit?

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By Amee Mehta

Mar 14th, 2023

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. Two common approaches for smart contract security audits are:

Automated smart contract audits- The primary purpose of opting for automated audits is to get rid of 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, which are otherwise undermined, like insufficient encryptions.

After the DAO breach on the Ethereum blockchain, which seized around $60 million in Ether (ETH) and resulted in a hard fork (which happens when a blockchain diverges into two potential paths forward) of the Ethereum network, the importance of smart contract security audit has been proved to every organization. Smart contract audit professionals can protect you from a variety of glitches, such as;

To identify any vulnerability
Problems in smart contract operations
Unprotected access to sensitive information
Unsecured contract storage
Lack of contract upgradation
Insufficient coding

Smart Contract Security Audit Vs. Blockchain Security Audit Smart Contract Security Audit:

Aims at the security of a specific smart contract and its code.

Evaluate the contract's code for vulnerabilities, bugs, and security weaknesses.

Blockchain Security Audit:

Focuses on the security of the entire blockchain network.
Evaluates the network's consensus mechanism, network architecture, and node security.

No doubt, the overall purpose of both audits is to ensure the safety and stability of the blockchain system. The process of a smart contract audit As they understood the importance of smart contract audits, enterprises now hire blockchain solutions providers having a team of technocrats who can perform audits precisely and help remove flaws abrasively. Check out the standard procedure of smart contract audit;

Collection of Code Design Models- the first step is to examine the architecture and code specifications. Then, the auditors first gather all that information to ensure that third-party smart contracts are appropriately integrated. Also, this aids them in determining the goals and scope of the project.
Perform unit tests- Now, the audit performers start the testing, usually both manual and automated, to check the overall code of the contract.
Select the method of audit- Understanding the nuances between the audit methods and the need of the project, the auditor selects whether manual or automated audits and efficiently detect the flaws.
Draft the initial report- Once the process of audit is over, the auditors will draft an initial report listing the details of code vulnerabilities. This gives the project teams and experts a chance to resolve the issues.
Prepare the final report- After all the bugs are fixed, the auditors submit a final report ensuring the quality of the smart contract.

Conclusion: To encapsulate, we have an idea about smart contract auditing and its role in the coming years of blockchain technologies. Most blockchain development companies perform smart contract audits, helping organizations identify the problems in smart contracts before they can cause concerns. When most decentralized applications in blockchain technologies have started using smart contracts, it has become vital to adopt the best practices for auditing smart contracts to safeguard them.

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