EXPLAINER: What is Smart Contract Auditing and Why Should You Demand for One?

Typically, auditors will examine the smart contract code, produce a report, and provide it to the project for them to work with. A final report is then released detailing any outstanding errors and the work already done to address performance or security issues.

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A smart contract audit is a system for validating the functionality of a smart contract code and for identifying and correcting security vulnerabilities in smart contracts.

Smart contract auditing is for anyone who deals with smart contracts, whether you have an ICO, STO, fintech, games, or other smart contract-based Dapp solution.

Such an audit ensures that the smart contract code functions correctly and there are no loopholes in the security for attackers to hack the smart contracts that will lead to loss of stored or transferred funds.

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SEE ALSO: EXPLAINER: How Smart Contracts Work

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Security is one of the formidable concerns for smart contract implementation in present times. The concerns of inefficiency, security issues, and misbehavior could lead to extremely high additional costs in implementing smart contracts on a blockchain network.

Furthermore, you also have the risk of losing the whole contract and associated assets due to security vulnerabilities in smart contracts. 

Therefore, a smart contract audit becomes an important requirement in present times for the following reasons:

  • Better optimization of the code
  • Improved performance of smart contracts
  • Enhanced security of wallets
  • Security against hacking attacks

Auditing for smart contracts is broadly classified into manual code review and automatic code analysis:

  • The manual code review for smart contracts focuses on the team evaluating every line of code to identify any possible compilation, security, and re-entrancy issues
  • On the other hand, automatic code analysis relies on automated code review software which checks source code for compliance with a predefined set of rules or best practices. This comes with the added benefits of time-saving and precision

The smart contract audit cost might vary considerably according to the platform or tool you select to use.  

Some of the companies offering the audit of smart contracts for enterprises and projects include:

  • Hacken
  • CertiK
  • ConsenSys Diligence
  • A&D Forensics (Africa-based)
  • Kudelski Security
  • OpenZeppelin
  • QuantStamp
  • Halborn
  • SlowMist
  • Trail of Bits
  • ChainSecurity
  • PeckShield
  • SolidProof
  • ChainConsulting

Typically, auditors will examine the smart contract code, produce a report, and provide it to the project for them to work with. A final report is then released detailing any outstanding errors and the work already done to address performance or security issues.

A public audit report can also be made available to the market (recommended) to boost confidence in the project.

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RECOMMENDED READING: $2 Billion Lost to Crypto Hacks in H1 2022, Says CertiK Report

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