What is Smart Contract Auditing?
A detailed, methodical examination and analysis of the code of a smart contract that interacts with a cryptocurrency or blockchain constitutes a smart contract audit. This procedure is used to find bugs, problems, and security holes in the code so that we can recommend fixes and make changes. Smart contract audits are typically required because the majority of these contracts deal with money or other valuables.
Such checks are difficult because smart contracts frequently interact with one another and because any connections with external systems may leave the system open to attack. Due to this, the tests are frequently extended to include any other smart contracts participating in interactions, including both manual and automation testing.
Large sums of money are frequently managed using smart contracts, and a single flaw or vulnerability can lead to significant losses. More specifically, all the ecosystem's assets could be lost by the users and stakeholders of the aforementioned decentralized application.
The project team is informed in advance of the auditors' suggestions, and their responses are documented in the final report. It is regarded as a symbol of the project's authenticity and integrity. Teams are eager to obtain an audit for this reason in order to boost the project's credibility and gain the trust of users. Usually, these audits are conducted in stages.
The team and the auditing group must first agree on the audit's parameters and scope. The auditors are provided with information about the smart contract's architecture, design, and other specifics. The testing step follows, during which the auditors examine smaller pieces first before larger ones are examined (integration tests).
To seek for widely known vulnerabilities in the contracts, automated bug detection and analysis techniques are also used. In order to evaluate the findings in light of the developer's objectives, auditors manually review the code one last time. Finally, the report is published together with the conclusions and team-applied adjustments.
In the developing DeFi sector, where bug-filled smart contracts are frequently pushed out to satisfy investor demand, smart code audits are becoming more and more crucial. Due to this, there have been several expensive hacks in 2022 totaling millions, most notably Crypto(dot)com, Qbit, Wormhole,Beanstalk and more.