If your company operates on blockchain technology, you should be familiar with the concept of smart contracts. On the one hand, smart contract security audits may seem less popular due to their complexity and high resource requirements. However, the company's overall security strategy of protecting sensitive information from hacking attempts requires smart contract security audits.
A single bug in a smart contract can lead to failure of the entire structure and huge loss of revenue. This has been proven time and time again by past events. Three recent examples include the 51% attack on decentralized network PegNet (April 2020), the Lendf.Me platform losing $25 million worth of ETH, and the Parity wallet losing $650,000 worth of ETH (Parity 2 Hack) (2017).
Smart Contract Security Audit Overview
Similar to penetration testing procedures, a smart contract security audit involves a detailed examination of all components and functions of a smart contract's code, its intended purpose, and an analysis of its interactions with other cryptocurrencies. The main purpose of security audits is to analyze security problems, hidden vulnerabilities, errors and misconfigurations and suggest the best remediation measures.
As seen in the real world example above, it is important to address the security aspects of smart contracts, as they typically deal with sensitive customer and financial data. Therefore, smart contract security audits are complex. This is done by testing to detect vulnerabilities in contracts that interact with individual smart contracts, as well as existing integrations with other third-party software that may introduce external vulnerabilities into the system. is. This is also why smart contract security audits include both running tests and manual code analysis to cover all security aspects.
What types of projects require a smart contract security audit?
Companies using blockchain technology can benefit from smart contract security audits, but let's take a closer look at the specific types of projects that inevitably require such security testing.
DeFi Project
Smart contracts used in DeFi projects are becoming increasingly complex and can benefit from a fully comprehensive security audit. DeFi, or decentralized finance, usually refers to a collection of financial applications connected via blockchain technology. Banks use this service to provide both lenders and borrowers with additional security, privacy, and other provisions over traditional banking facilities.
Token Contract (crowd sales)
Security audits of smart contracts should be conducted using various programming languages such as JavaScript, C++, etc., across major protocols to capture all potential vulnerabilities in various applications. I have. Crowdsales typically involve the sale of token contracts by forming a master contract that specifies rules and regulations. This activity is done to meet the financial requirements of the corporate project, after which the token provider becomes a shareholder of the project.
Wallet (dApps)
A decentralized application (dApp) acts as a wallet for transaction fees and some ETH. Their primary distinguishing characteristic is that decentralised protocols like Ethereum are used to run and manage them. It also includes complex smart contracts that require proper auditing practices and security measures to prevent financial loss.
4 Types of Smart Contract Audit Services
Smart contracts can differ between the decentralized applications that use them, so it's important to understand their unique points and design security audits accordingly to uncover the greatest number of vulnerabilities. is.
1. Full Security Audit
It covers all aspects of smart contracts, including interactions with other smart contracts and third-party applications. First, we use a combination of automated and manual testing tools to uncover potential vulnerabilities for basic exploitation, followed by more in-depth checks. Manual testing techniques are important here. These help us understand the context in which smart contracts work and their intended purpose. This should be remembered before testing for security issues. Otherwise, just using an automated testing tool will show you the risk of getting a "false positive".
2. Basic Security Audit
This type of audit is designed with standard token contract assumptions in mind, such as: ERC20 and ERC721. It is not extensively contracted and covers basic aspects of operational needs. Companies with less involvement in blockchain technology-based applications can opt for this kind of testing procedure.
3. Interim Audit
Typically used for DeFi projects, it is primarily used to check the intricacies associated with smart contracts and ensure that the right level of protection is implemented for customer data and their finances.
4. 24 Hours Audit
If the project is still running in the development cycle, has a map of milestones, and requires multiple iterations to overcome obstacles, this kind of audit is perfect for your requirements. Testers accompany the application throughout the development cycle for regular reviews and security recommendations before moving forward.
This should give you a fair idea of the types of projects that can benefit from smart contract security audits and the types of tests that should be designed to meet appropriate security requirements.
