What You Need to Audit Smart Contracts

Significance of Smart Contract Audit Service

The use of smart contract technology is growing due to the increasing desire of companies to protect against malicious agents and prevent loss in revenue. As smart contracts are quite vulnerable in the case of cyber attacks, auditing is one of the tools to check out whether contracts are fully performance-optimized and guarantee that there are no security issues. You may be curious about the standards of auditing. However, indeed, there is no universal standard to apply for every project as they are preconditioned by project peculiarities. Anyway, if customer satisfaction is your top priority, then, a smart contract audit service will be a must for you to demonstrate smart solutions, streamline processes, and offer security advantages. Thus, let’s review two main types of smart contract auditing to understand which one is better for your company and which one can bring the desired outcomes.

Types of Smart Contract Auditing

Before conducting smart contract audits, you need to understand what type of auditing to select. Auditing can be manual or automated, and the choice of type depends on your project needs. What are the differences between them, you may wonder? Manual code analysis is the best approach to identify coding issues, especially if you have a sufficiently resourced development team. In this case, the task of the team is to study each line of code to inspect it for re-entrance errors, security issues, and compilation that can challenge coding. Of course, a particular focus should be made on security issues as they are direct threats to the long-lasting and effective implementation of smart contracts.

Automated code analysis differs from manual analysis because it saves time for code review. The advantage of the automated approach is that it contributes to penetration testing and a quick search of vulnerabilities. For example, conducting automated code testing is used in Ethereum smart contracts as their projects are big and require quick implementation. However, automated auditing has many weaknesses like missed vulnerabilities and falsely identified code that can challenge security and lead to project failure. For this reason, it is recommended to perform thorough manual auditing after having conducted automated code testing to ensure quality security checking. Let’s focus more on each type of smart contract audit.

Manual Auditing

Manual auditing can be done in two forms. The first one involves performing a free investigation that has an exploratory character. In most cases, this type of auditing is based on a developer’s experience that helps detect errors and vulnerabilities. The second form of manual auditing is based on a standard list of flaws that are confirmed by a team. This approach to auditing smart contracts is quite active and involves QA engineers and analysts who participate in all stages of preparation and execution.

Automated Auditing

The automated smart contract audit involves bug-detection software that defines the exact locations where errors can be found. The automated approach is widely used for projects that should be quickly implemented. One of the weaknesses of automated auditing is that it is highly dependable on the context which can lead to missing security vulnerabilities. However, the advantage of automated auditing is that it can classify code errors according to their severity and potential impact. Let’s describe the peculiarities of smart contract audits and define key strategies.

The Peculiarities of Smart Contract Audit Process

The process of a smart contract audit is quite complex and sophisticated and typically consists of the following stages:

• Collecting the code specifications. The purpose of this phase is to ensure the integration of smart contracts and examine their architecture. For auditors, this is the opportunity to understand project goals and scope.
• Unit testing conducting. This strategy is used to test smart contract functions and guarantee that the unit test contains a smart contract’s code. Auditors can conduct both manual and automated testing, but it is usually automated.
• Choosing an auditing approach. At this stage, auditors prefer using a manual audit to an automated one. The main reason for this is that manual auditing can detect front-running attacks more efficiently.
• Providing the first report. This strategy involves drafting the initial report where the code flaws will be identified. In addition, this draft will contain recommendations for the project team to fix existing errors.
• Final audit reporting. This step includes informing about further solutions and actions to be made to resolve issues found during the smart contract auditing.

Conclusion

With this guide, you are strategically equipped and prepared to perform smart contract audits. We are convinced that smart contracts auditing can bring real benefits to your company as it is a procedure that helps to achieve security by using blockchain technologies. It’s up to you whether to conduct manual or automated auditing, but you should keep in mind that a combination of two models is the most effective way to test your code and detect vulnerabilities. If the smart contract audit process still seems to be complicated and full of challenges, do not hesitate to reach Wetelo. Contact us if you want to use blockchain technologies and need to conduct a smart contract audit.