All posts by : Muhammad Zain

A smart contract audit involves a detailed analysis of the contract's code to identify security issues and incorrect and inefficient coding, and to determine ways to resolve the problems. The audit process is an important part of ensuring the security and reliability of blockchain applications.

It's often said that with a smart contract, the code is the law. This means there is no room for error. The contract can run only as the coding dictates. And once smart contracts have been deployed, developers can't fix them. They must create a new version and deploy that, which can be costly and time consuming. Smart contractor auditors can help to ensure that coding is safe and secure.

Why are smart contract audits important?

While blockchain technology is secure, blockchain applications have security vulnerabilities. One of the best-known security incidents involving smart contracts was a theft worth $50 million in 2016. Hackers exploited vulnerable code in a blockchain investment fund, the DAO, controlled through smart contracts. A smart contract security audit team can help to mitigate such risks.

It can cost about $7,000 to $45,000 to create and deploy a smart contract. For a contract to be used by a large organization, the price could hit around $100,000. The smart contract audit methodology combines a line-by-line manual analysis with an automated analysis using a test suite of tools. An audit can provide peace of mind that your blockchain security is tight before you proceed to smart contract implementation. It also can assure investors and customers that the contract will work according to plan and their financial assets are secure.

When it comes to developing blockchain applications, bug-free code is not a nicety, it's a necessity. With a detailed report, you can be confident that your smart contract security is sound and the application is ready for deployment.

How much does a smart contract audit cost?

The cost of a smart contract audit varies depending on the size and complexity of the application. In general, smart contract auditors typically charge $5,000 to $15,000, but might charge more depending on the size and complexity of the contract.

If you are considering using a blockchain application, smart contract auditing by an experienced auditing team is a no-brainer. Smart contracts execute financial transactions and are relied upon for essential functions. Unlike with other types of software, bug-free code is vital here.

How does an audit work?

A smart contract audit is a comprehensive process. A smart contract can consist of thousands or tens of thousands of lines of coding. Even obvious issues sometimes get lost in the sheer bulk. The testing tools and human auditors must discover errors and potential vulnerabilities in the coding as written and in what is missing. Let's break down the process of a smart contract security audit.

Documentation

The first step of an audit is to gather all relevant documentation. This includes the white paper, codebase, and any other material related to the smart contract. Through reading the design documentation, the auditor can gain a high-level understanding of the blockchain application.

Without access to documentation, the auditors will have no way of knowing what the smart contract is designed to do. Documentation, including a full specification for the project, is essential to the auditing process. For auditors to see the code working as intended, they must know what you want the code to achieve.

In this stage, the developers and auditors must agree on a code freeze. No more code will be written, or the contract audit will not consider any code written after that point.

Run tests with tools

Once the auditor has a good understanding of the code and the application, they will run automated tests with various tools. This is by far the easiest way to detect potential issues. The auditors will take a range of steps, including integration tests exploring large amounts of code, unit tests looking at individual functions, and penetration testing to probe for security vulnerabilities.

Line coverage is a great way to measure how well the tests cover the code. High line coverage indicates that the tests are doing a good job of exploring all of the lines of code in the application. After the automated tests are complete, the auditor will move on to manual testing.

Manual review of code

Even though automated tests can identify possible vulnerabilities in the code, they cannot understand what a blockchain developer is trying to achieve with their application. They also can turn up false negatives. This shows why a manual review of the code is essential. By reading the code and understanding how everything fits together, auditors identify potential issues that automated tests miss.

When an audit team analyzes the code, they can refer back to the project specification and any other supporting documentation to see whether the code performs as it should. A mixture of manual and automated testing is vital to ensuring nothing slips through the cracks.

Resolve issues

Once the auditor has found issues in the code, they will work with the project team to resolve them. This process can be long and difficult, but it is essential to the success of the project. By resolving all issues, you can ensure that your smart contracts are ready for deployment.

When it comes to blockchain applications, security is of utmost importance. That's why it's essential to have a team of experienced auditors help identify and mitigate potential issues with your code. Before beginning the deployment process, make sure that you have allowed enough time for a full security audit.

Audit report

Once the audit is complete, the auditor will provide a report detailing their findings. This report will be a valuable resource for the project team and anyone else involved in the application. It will help to identify any potential issues that may have been missed and provide a roadmap for resolving them.

How long does a contract audit take?

The time it takes to complete a smart contract security audit depends on the size and complexity of the code. Generally, an audit team can complete a detailed report within a few days. However, larger applications may take longer to audit. Allowing time for a full security audit is essential to the success of your blockchain application.

The findings

A security audit is so essential, it might as well be considered as a part of smart contract development. Learn more about building smart contracts on Hedera today.