How to Perform a Smart Contract Audit

Interested to know more about how auditors perform a smart contract audit?

Smart contract technology has always been a boon for people. But on the flip side, technology also paves the way for numerous issues, properly auditing them being one of the most crucial ones.

When all the contracts are fully performance-optimized, you can only think of not coming to terms with dangerous hacking exploits. Thus, smart contract auditing becomes vital here.

If you are a newbie in this domain, it may be challenging. Worry not; this blog is about performing a smart contract audit. You will get an insight into how auditors carry out this process. So, let's begin.

Which Approach Is The Best For Performing Smart Contract Auditing?

Two methods of conducting these audits are manually looking for vulnerabilities in the source code line-by-line or automatic code analysis.

Let us understand both of these briefly.

Manual Review of Code

In this approach, the team of auditors examines each line of code to scrutinize it and compile all the security issues and re-entrance mistakes. Manual audit includes checking the code line by line for flaws and programming faults.

It also shows whether the smart contract is adhering to its internal business logic. Additionally, it recognizes edge situations and optimizes code for gas efficiency.

Automatic Code Analysis

The advantage of automatic code analysis is that it allows software development teams to review their code much more quickly.

Automated auditing is the process of checking code for errors using auditing tools. It ensures that every aspect of the smart contracts is covered, leaving no room for human mistakes.

A comprehensive penetration test that includes automated code analysis is also made possible by such an audit and helps uncover vulnerabilities very rapidly.

6 Steps Of the Smart Contract Auditing Process

Are you aware of the nitty-gritty of this process? Quite obvious. People rely on auditing so much to save their funds but need to pay more attention to the stages of this vital process. So, let us talk briefly about the steps that the auditors take.

The auditing process is divided into the following six steps.

Step 1: Manual Audit

Manual audit includes checking the code line by line for flaws and programming faults. It also shows whether the smart contract is adhering to its internal business logic. Additionally, it recognizes edge cases and optimizes code for gas efficiency.

Step 2: Testing

It means testing and executing the code by deploying it on the testnet, simulating the smart contract functionalities, and checking it for the mainnet deployment.

Step 3: Unit Testing

To achieve complete risk coverage, auditors run unit tests created by developers. Additionally, it uses differential testing, and auditors make test plans that include proof-of-concept (POC) of severe flaws.

Step 4: Automated Audit

Automated auditing is the process of checking code for errors using auditing tools. It ensures that every aspect of the smart contracts is covered, leaving no room for human error.

Step 5: Fuzzing

Black Box testing methods like fuzzing, automated flawed, or random data injection, are used to identify implementation flaws.

Finding bugs automatically is the practice in question. With randomized inputs, fuzzing stresses the application/DApp and results in unexpected behavior, asset leaks, or crashes.

Step 6: Reporting

The last element of smart contract code audits is reporting, generally done in two phases: Initial and Final Report.

Compilation of the initial report is done after finishing the audit procedure once. It includes a summary of the audit, fuzz tests, a table of vulnerabilities, and the auditor's advice.

Client or project developers must make the necessary modifications in the code, known as code refactoring, based on the first report.

Following code restructuring, the full audit procedure is repeated to check the code for any remaining problems. The customer is then given a final audit report that details the smart contract's performance and identifies any issues.

Now, we know what smart contract auditing is and how it works.

Types Of Cybersecurity Attacks.

These are examples of cybersecurity attacks that we are seeing on a high rise these days.

• Short address attack
• Over and underflows
• Replay attack
• Reentrancy attack

If you need to be better-versed with these attacks, then it is better to gain some knowledge on them and go for smart contract auditing.

There is another important concept when performing an audit for smart contracts. Let us proceed ahead.

What Is Smart Contract Performance Validation?

As you know, blockchain is immutable, and the transactions cannot be reversed once deployed. Therefore, you must ensure that all your smart contracts are completely performance-optimized before deploying them on the blockchain.

It is no secret that the quality of the code decides how well any smart contract will perform.

Thus, it is quintessential to include performance validation. It will save a lot of time and money to execute properly-optimized contracts.

As part of the validation process, the code will be examined for any mistakes that might hinder performance or, in any other way, impact other areas of the contract.

When doing a performance review, it is simplest to begin by undertaking a formal verification to see if the contract is executed in a fashion that satisfies all of the commitments that both parties agreed upon when entering the contract.

Final Thoughts:

Although there are several strategies for conducting a smart contract audit, the result is usually the same. Any audit should ensure that the code is free from errors and bug-free.

The complete audit procedure is growing simpler daily since more potent technologies are being developed to automate smart contract audits.

However, we still have a long way to go in creating a smart contract ecosystem that is sophisticated enough to take the role of manual code reviews.

Most developers understand the benefit of having a completely different team of Dapp professionals evaluate their code.

The advantages of tiered code inspection cannot be stressed, whether this is a committed development team or a community of passionate, smart contract programmers who are prepared to audit your code for free.