Smart Contracts And Why Do We Need To Audit Them

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Smart Contracts And Why Do We Need To Audit Them

Smart contracts are agreements between two or more parties stored securely inside a blockchain.

A smart contract is a computer protocol that executes a task based on the pre-specified conditions. In general, smart contracts are utilized for automated payment, confidentiality notice transfer, trade deals, loan disbursals, and regulatory & compliance agreements.

Smart contracts are being leveraged in various sectors such as supply chain management, electoral voting, ICOs, and exchange processes. Above all, the smart contracts are built on a blockchain framework and they inherits all the features of the DLT such as transparency, security, and immutability.

Smart contracts are agreements between two or more parties stored securely inside a blockchain. Smart contract development services include creating & implementing immutable and self-executing computer codes that facilitate contracts without intermediates.

Smart contract development services

The reasons to audit smart contracts

Smart contracts are recommended to be audited by professionals to check the following qualities:

Performance-optimization,

Devoid of security issues & loopholes,

Design issues,

Code violations,

Vulnerabilities,

Impact & Behavior in negative-case scenarios.

Smart Contract audit - A gist

Smart contract audit is the process of examining on the code that is used to underwrite the terms and conditions of the deal. The audit process helps development and the design teams to identify the potential bugs and rectify them before deployment.

Usually, the auditing of smart contracts is done by third-parties like professional blockchain developers or Ethereum smart contract audit company to ensure the code is reviewed completely. The process of auditing the smart contracts is mandated as they are deployed on the blockchain network.

The professionals auditing the smart contracts focus on these specific areas:

Common bugs such as stack, compilation, reentrance errors.

Hosting platform common errors and security flaws.

Break testing(Stimulating the negative case scenarios).

Audit Process - A brief

In generic, smart contract auditing is done by two approaches: Manual & automated code analysis. Usually, the automated test suite runs through the code base and again the manual verification is done in smart contract audit services. The smart contracts automated test suite is in the early stage, and hence to ensure 100% line coverage, the auditing team processes both approaches.

Manual code analysis VS Automated test suite

Manual code analysis of smart contracts suits best for the medium-scale and large testing teams. The testing team examines each code piece and scrutinizes it for compilation. This is the best-suited technique for long-term smart contract applications.

Automated smart contract auditing suits best the teams at which there are limited resources for testing the smart contracts. The automated test suite enables penetration testing that helps identify the bugs at a quick pace with less workforce.

Benefits of Smart Contract Audit

Increases Efficiency

Smart contract audit helps to optimize performance for facilitating hassle-free transactions. It can remove the bugs, improve the performances, and increase the overall efficiency.

Prevents vulnerabilities

Through smart contract audit, we can easily detect any defects associated with coding that has the potential to expose the business for hacking or any other thefts. Hence, all vulnerabilities and losses could be avoided.

Ensures Security

In auditing the smart contracts, each nook and corner functionality can be verified with definite conditions to minimize the possibilities of risks. It enables ultra-high security protection to the blockchain project.

Code Improvements

A keen inspection of smart contract coding helps to encounter all flaws in digital transactions. With the help of audit results, we can fix all errors, and update the code to launch the successful products.

Attracts investors

Investors prefer to choose crypto coins or blockchain ventures which have zero vulnerabilities, thereby increasing the trust of the crypto community ensuring the security of coins or project.

Final standpoint

In general, Ethereum smart contracts are to be spied on the following issues:

Reentrancy attack

Over and underflows

Reordering attack

Replay attack

Short address attack

Be it an automated or manual code analysis, it’s the best practice to get audited smart contracts from the professional team. To know more about the blockchain space, do connect with us.