Introduction

The concept of smart contracts was introduced in the year 1996 by Nick Szabo. However, it could not evolve strongly beyond theory until the development of blockchain technology.  Even though Bitcoin was introduced much before Ethereum but the former did not support smart contracts. Thus, the inception of Ethereum in 2015 made smart contracts a reality for a decentralized ecosystem. Eventually, the growth of smart contracts created the need for more secure, bug-free, and reliable smart contracts that cannot be tampered with.  As a result, smart contract auditing became a mandatory step in the process of developing smart contracts. 

What Is Smart Contract Auditing?

It refers to the process of carefully scrutinizing the smart contract codes before deploying them. Since smart contracts are immutable therefore they cannot be edited post-deployment. Thus, they are thoroughly examined to find any vulnerabilities or bugs and are fixed so they do not impact the functionality of the project. It is can be said that smart contract audits are conducted to optimize codes and improve the integrity of the project. During the process of smart contract auditing the developers inspect source code line by line to ensure the code quality is not compromised in any case.
Smart contract auditing addresses the following vulnerabilities – 

• Reentry attacks 
• Timestamp dependences
• Syntax errors 
• Frontrunning 
• Integer underflow and overflow
• Denial of Service (DoS) attacks
• Other undefined behavior of smart contract codes

Importance Of Smart Contract Auditing

Since smart contracts handle assets worth millions, therefore it becomes a crucial task to ensure that these smart contracts are free from vulnerabilities and loopholes. Thus, smart contract auditing helps to mitigate security risks and is beneficial in the following ways – 

• Provides increased security
• Facilitates source code optimization 
• Allows better smart contract functionality 
• Helps to seek compliance and regulatory approval
• Promotes user trust and boosts performance

Types Of Smart Contract Audits

Based on the nature, scope, and status of the project, smart contract audits are classified as follows – 

New Audit (Pre – Deployment Audit)

This audit is performed when a smart contract is created for the project that is about to be launched. Here, the key objective is to spot and fix potential vulnerabilities or defects before the smart contracts get deployed. It largely includes functional audits, security audits, code reviews, and compliance audits.

Repeat Audit 

 A repeat audit is conducted when a new version of the existing project is created. Thus, its main objective is to review new modifications or adjustments in the smart contract. This in turn ensures that the latest modifications do not create a detrimental influence on the performance of the project. 

Incident Audit 

The incident audit is conducted when some security or exploitative incident has been identified in the smart contract. The primary objective is to identify the cause/ genesis of the incident and evaluate the other underlying vulnerabilities associated with it. Thereupon suggest the fixes restricting the occurrence of a similar event. 

Retainer Audit

This form of audit is carried out on a regular or ongoing basis.  The auditor on retainer is supposed to carefully examine and evaluate the smart contract’s security regularly. This helps to swiftly find and address problems that may develop.

Process Of Smart Contract Auditing

To conduct the proper smart contract audit, organizations need to follow certain techniques and norms in a structured manner. However, there isn’t any pre-defined structure, it may vary based on each company and project. Thus, some of the generic steps involved in the smart contract auditing process are as follows – 

• STEP 1: Gathering specifications to understand the behavior  of the smart contract
• STEP 2:  Automating review and testing process
• STEP 3: Conducting manual analysis and testing
• STEP 4:  Conducting functional testing 
• STEP 5: Preparing and submitting the audit report 
• STEP 6: Rectifying and inspecting the codes  
• STEP 7:  Documenting the final report

Commonly Used Smart Contract Auditing Technologies 

Smart contract development companies like www.esrotlabs.com use smart tech stacks to conduct smart contract audits. The use of the following array of tools and software for smart contract auditing makes the process highly efficient.

SkyHarbor 

It is a security analysis platform launched by Certik and combines the functionality of formal verification and manual testing to discover potential vulnerabilities in the smart contract. As a result, SkyHarbor is known to prove the correctness of smart contracts rigorously and hence maintain its integrity. It also ensures that smart contract work on the bases of the desired specifications while maintaining security.

QuillHash

This is a popular smart contract audit tool and leverages automated testing, manual code review, and best security practices to evaluate smart contracts. Besides identifying the issues in the smart contract codebase QuillHash can also integrate with other prominent testing networks and conduct effective smart contract testing.

MythX

This is also a security analysis platform meant for Ethereum smart contracts. This software utilizes a combination of static analysis, dynamic analysis, and symbolic execution to identify the vulnerabilities in the smart contract. Moreover, the platform also supports popular smart contract languages such as Solidity and Vyper. As a result, it facilitates several integrations with the development environments.

Final Words 

Evidently, smart contract development is the heart of decentralized development. Thus, there shall not be any compromise with the security, integrity, and reliability of the smart contracts. To achieve a target of flawless smart contract development and deployment, it is important to choose an experienced team of blockchain developers, which is a task in itself. To pick the right development fit for your project do visit www.esrotlabs.com  and get your job done without compromising on quality.