Why Is Smart Contract Audit Important?

Smart contracts were introduced in blockchain to facilitate secure and undisputable financial agreements. Vast sums of money are transacted through them, which makes them reliable in reducing loss risk. They are developed using complex programming languages and algorithms that are difficult to intercept. Competent contract developers may be tech geeks, but that does not make them perfect, implying that their coding is not immune to mistakes. A minor coding mishap is enough to give hackers the access they crave to make away with available funds.

Whichever blockchain-based domain you deal with, you need smart contract auditing services from a reputable smart contract audit company to eliminate costly flaws before going live with the network. Smart contract auditing costs may tempt you to forego the procedure, but the amount you stand to lose following an attack is more.

By auditing a smart contract, you remove vulnerabilities from the network that could warrant an attack. Bugs, coding errors, and other inconsistencies are eliminated through auditing before launching a smart contract. There are multiple blockchain applications where these contracts are implemented, such as decentralized apps, crypto wallets, non-fungible tokens platforms, etc. 

4 Ways Smart Contract Auditing is Beneficial

The safety of your data and digital assets depends on your commitment to building user trust and keeping threats at bay. By conducting smart contract auditing, you secure transactions and avoid potential attacks that could ruin your business or company’s reputation. Here are seven ways proper auditing can benefit your blockchain operations:

Security

One of the top goals of auditing these self-executing agreements is to ensure the network’s security. Your auditor checks the code for loopholes that may get exploited by hackers who have no remorse when sweeping the accounts clean. Hacking and fraud can only occur in blockchain if a weak code is involved, but auditing can help prevent the threats from materializing. Login errors and reentrancy are some of the areas prone to have weak ends that may require fixing.

Attackers may also bombard the contract with several requests to render it unresponsive so that they can manipulate it in what is called a denial-of-service attack. Logic errors can also render a smart contract useless because the code does not reflect the rules of the contract. A great example of logic error happens when voters can cast their votes more than once hence exaggerated results. Auditing can help discover and fix such code flaws, preventing loss of funds or freezing of accounts.

Compliance with Regulations

Another way auditing can help you win users’ trust is by ensuring your smart contracts comply with existing industry standards. The regulations, which include anti-money laundering and know-your-customer, vary in different regions. Hence, it is critical to ensure you adhere to them. Coding industry compliance is crucial in avoiding legal repercussions if a smart contract user discovers you risked the contract’s safety by not following the industry’s regulations.

Gas Usage Review

Transaction fees paid by users on a smart contract should be optimized to ensure that overcharging or undercharging is not taking place. Users will quickly exit a smart contract they feel is charging more than recommended. Auditing is critical in optimizing transaction fees. There has been a surge in gas fees on Ethereum Virtual Machine smart contract lately, and users have difficulty completing transactions due to the spike. Gas optimization helps prevent such occurrences that could affect your platform’s reputation.

It helps Build Trust and Reputation

Failing to audit the contract can result in attacks that are not good for your company’s reputation. Users are drawn to smart contracts that offer robust security to their transactions because they give them the confidence to transact huge amounts of funds without fearing losing them to lurking hackers. You can retain current users and win new ones by guaranteeing them safety in their transactions. Facilitating a safe transacting environment is also great for attracting new investors.

The Best Practices In Contract Auditing

There are best practices to abide by when doing smart contract auditing. They are more like guidelines for executing the auditing, and following them as they appear below will provide great auditing results:

A Review Checklist

This is a comprehensive code review list highlighting the areas to examine. Areas to review may include user authentication, error reporting, gas usage, and code analysis.

Compile a List of Potential Weaknesses

Write down the type of issues to look out for and then use the right tools to find them. The threats to look for in the contracts may include integer overflow or underflow, logic errors, time manipulation, and other detectable threats. 

Also, it is important to highlight the tools to scan threats during the auditing. Additionally, some auditors combine manual and automated auditing methods for the best results. While computerized auditing is fast and affordable, manual auditing is more thorough and requires much time.

Code Auditing and Testing

The auditing reveals present flaws that need fixing. Testing is conducted to confirm that the contract code is working as intended. Testing gives the green light to either launch the smart contract or fix underlying issues.

Document the Findings

Potential threats and other coding flaws are documented along with the recommended solution. Smart contract developers can initiate the remedies and get the contract running. Periodical scans and auditing are still recommended even if no issues are found in the auditing process. Hackers never give up on their quests; new threats may emerge during blockchain upgrades.

Final Thoughts

Smart contract auditing is vital for small, medium, or large businesses utilizing smart contracts. Recovering stolen data or funds after a blockchain network attack is next to impossible, so you should prioritize smart contract auditing. Newer threats emerge as smart contracts advance technologically, so regular auditing and testing is the perfect way to avert and contain threats. Smart contract auditors are best placed to review your network and find and seal potential loopholes comprehensively. Besides inspecting the code for vulnerabilities, smart contract auditing service providers also optimize gas usage and guide you in maintaining network safety through routine security scans.