A smart contract audit is a process where a smart contract is examined for security flaws. The process can be either automated or manual – and is usually performed by a third-party firm or specialist.
Performing Smart Contract Audit
Smart contract auditing is a process used to identify flaws in the smart contract code and logic. It helps maintain the security of the contract and project itself, giving more credibility and assurance to old and new users alike. Moreover, it provides insights into the functionality of the smart contract and can help with code and logic optimization.
Before starting an audit, it is important to understand the processes around it and be ready to be tightly involved with the audit team. When developers decide on the release candidate they would like to use for the audit, they send it to the audit team for a thorough check. Then auditors assess the code and send back recommendations for improvements or fixes – and the process continues back and forth until both parties are satisfied with the result. When they reach an agreement, auditors prepare a final report that can be released to public.
Approaches to Audit
Smart contract audits involve a wide variety of scenarios that depend on the project’s scope and code complexity. Typically, the auditing team will perform a comprehensive vulnerability scan based on the project specification to make sure that all the functionality is working as intended.
There are various approaches when performing an audit – it can be automated tests, manual code checks or a hybrid of both. Automated tools can look for common vulnerabilities in the code, but they can also create false positives or miss the logic loopholes altogether. Using a mixture of manual and automated testing is critical to ensure the safety of the smart contract.
To perform their job, smart contract auditors must first assess the design and architecture of the project – studying source code and product documentation, asking for business logic and any clarification for various smart contract functions. They will then run automated test cases on the code as a whole and on individual functions – to see that all parts are working as intended.
Cost of a smart contract audit
The cost of a smart contract audit varies depending on the size and complexity of the smart contract, timeframes and the audit firm name. An audit that involves only a few simple code lines in a couple of contracts costs only a few thousand dollars, while a project with more sophisticated code and complex logic with thousands of lines may incur a cost of up to a few hundred thousand dollars.
Following the completion of the smart contract audit and the public launch, many projects start bug bounty programs to outsource and incentivize community members and third-party developers to continue with security inspections. And, while it’s one of the simplest methods to increase overall project security with minimal work from the development team, there are alternative approaches to enhance the project security. One of them is the use of risk management tools and platforms to monitor the health of projects, both in terms of smart contract functionality and business logic. Apostro and Gauntlet are two solutions in the DeFi security sector that can assist projects with risk management and security, safeguarding against economic attacks and market conditions.