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What is a Blockchain Smart Contract Audit?

Estimated read time: 5 minutes

Smart contracts have considerably extended the promises of blockchain, however, you need to get them right. Recovering from smart contract bugs can be hard. A blockchain smart contract audit can help you to prevent smart contract bugs.

Blockchain smart contract audit: What it is

Blockchain smart contract audit is a methodical way to detect bugs in smart contracts. Organizations need these audits to prevent bugs in the “production-version” smart contracts. A blockchain smart contract audit includes both code review and testing.

Organizations typically engage independent smart contract auditors, and such reviewers need considerable skills and experience. A key focus area of smart contract audits is security. However, smart contract audits focus on functionality, performance, and code quality too.

Why do you need a blockchain smart contract audit?

Ethereum smart contracts helped entrepreneurs to establish decentralized business models. Developers created DApps (Decentralized Apps), which run smart contracts in their back-end.

Smart contracts are autonomous and open-source. They are stored on the Ethereum blockchain, therefore, they are immutable. Their execution results are also stored on the Ethereum blockchain. Therefore, the execution of a smart contract is irreversible.

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Immutability and irreversibility certainly offer advantages. However, they also need you to be careful when developing smart contracts. You can’t modify them after you deploy them. Bugs in smart contracts can adversely impact their execution, however, you can’t reverse their execution. The 2016 Ethereum DAO hack was a case in point. It was a case of exploiting smart contract vulnerabilities, and the recovery was very complex.

A blockchain smart contract audit helps you to avoid bugs. You can implement a smart contract “first time right”.

What does a blockchain smart contract audit involve?

A blockchain smart contract audit typically involves the following:

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  • Project teams that develop smart contracts engage independent smart contract auditors. The auditors often represent a smart contract audit firm, and they have considerable experience.
  • Smart contract auditors get the relevant project documents from entrepreneurs and study them.
  • Auditors get access to the smart contract repository, and they ask for a “code freeze”. They don’t want any modifications to smart contracts that are being audited.
  • Auditors test the smart contracts. These tests include unit tests, integration tests, etc. Smart contract auditors try to achieve a high test coverage. This improves the chances of detecting bugs.
  • Subsequently, smart contract auditors use automated smart contract code analysis tools. QuillRelay is an example of such tools.
  • Automated code analysis tools aren’t enough. Therefore, smart contract auditors undertake a manual analysis of the code.
  • Auditors pay special attention to unearthing security vulnerabilities. However, they also analyze whether the smart contract delivers the intended functionality. They check aspects like performance and code quality.
  • Smart contract auditors prepare a report highlighting all findings. The project team resolves the issues, and the auditors verify that.

FAQs

1. If Ethereum smart contracts can be hacked, then is the Ethereum blockchain network secure?

The Ethereum blockchain network is secure since it employs security features like digital signature, data encryption, cryptographic hash functions, and consensus algorithms. Smart contracts run on the top of this network. They can be hacked. That’s not the same as hacking Ethereum blockchain.

2. What are the top smart contract vulnerabilities?

The top smart contract vulnerabilities are reentracy, access control, arithmetic issues, unchecked return values for low-level calls, denial of service (DoS), bad randomness, transaction ordering dependence, timestamp dependence, and short address attack.

3. Is there any smart contract verification tool?

VeriSol is a formal verification tool for smart contracts written in Solidity. A team of researchers in Microsoft has developed VeriSol. It’s an open-source project that focuses on the mathematical verification of Solidity-based smart contracts.

Learn more about blockchain development from our expert articles:

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