A smart contract audit on blockchain is an accurate and thorough analysis of the application smart contract sets. The main aim of such an audit is to detect and eliminate smart contract vulnerabilities as well as check the reliability of the contracts’ interactions with each other.
Is it important? We would say it is essential for any blockchain-related project. The reason is a growing number of hacker attacks aiming to steal user data and funds. In Q1-Q2 2022 alone, the industry lost over $2B to hacks, scams and exploits. And this is not even the final number.
That is why, today, we’d like to show you how to audit smart contracts and what essential factors to take into account while checking for bugs and errors in the blockchain part of your project.
So why us?
The Blaize team has conducted more than 120 smart contract security audits over the course of 5 years. We have looked through 500K+ lines of the code and found 250+ critical vulnerabilities that helped us save over $100M from hacking. That is why we are considered real experts when it comes to auditing and deploying smart contracts.
If you are looking for a reputable smart contract auditor, choose Blaize – we’ll help you make sure that your smart contracts are as secure as possible.
SMART CONTRACT SECURITY AUDIT VS BLOCKCHAIN SECURITY AUDIT: WHAT IS THE DIFFERENCE?
As you start looking into smart contract and blockchain audits, you might be wondering if there is any difference between the two, and if so, which one should you choose?
A smart contracts security audit is an in-depth analysis of the protocol’s smart contracts, which includes automatic and manual testing, business logic analysis, a detailed review of the code against all known vulnerabilities, comprehensive recommendations on how to eliminate bugs and vulnerabilities, and much more.
A blockchain security audit is an overall assessment of the core blockchain ecosystem of the project aimed at eliminating any loopholes within this technology. The evaluation also includes automatic and manual testing, but it does not cover such things as the business logic of the protocol, being focused mainly on the tech stack, formal verification of the consensus, cryptography review, and verification of the secure communication with blockchain nodes.
Read Also: The Best DeFi Startups
Why Smart contracts audit is important?
A high level of security and code quality are the main requirements for developing a reliable smart contract. Otherwise, your project may experience a hacker attack and suffer enormous losses, as we’ve seen happening before with a list of well-known projects.
Here are just a few recent examples of elaborate smart contract exploits:
- Ronin Network – $624M loss;
- Wormhole – $326M loss;
- Nomad Bridge – $190M loss;
- Beanstalk – $181M loss;
- Harmony Bridge – $100M loss.
Find out more about these and other hacks and learn how to prevent them in our article: How to Secure Your DeFi from Hacking.
Such exploits purely demonstrate that even a small bug in smart contracts’ logic or functionality may lead to irreversible consequences.
Therefore, even before conducting the audit, the protocol should consider using smart contract auditing tools, which is the best way to increase the security of your smart contracts and prevent several types of attacks on your protocol in the future.
Smart contract audits can help you ensure top-notch security of your protocol and more:
- Detect any vulnerabilities and find a way to fix them.
- Improve smart contract performance.
- Ensure correct integration into the DeFi ecosystem.
- Boost your project’s credibility, ensure trust and respect.
- Provide safe and secure liquidity flow in the protocol.
Read Also: Blockchain Technology Adoption to Contact Center
WHAT ARE THE MOST COMMON SMART CONTRACT ATTACKS?
One of the best ways to prevent a potential hacker attack and your own protocol exploit is to be aware of the existing hacks and study them carefully. Smart Contract Weaknesses classification presents a list of all known smart contract vulnerabilities and examples of how to deal with them.
Reentrancy is one of the common and most dangerous Ethereum vulnerabilities. It can have a variety of forms and make different changes to the calling function, which makes it highly unpredictable.
As reentrancy attacks may occur across multiple functions or contracts, they are not so easy to prevent. The experience and deep understanding of smart contract logic is the main requirement for the developers who deal with reentrancy mitigation because a single function solution is not enough in this case.
The next very common and costly attack is front-running. This issue became one of the biggest vulnerabilities in DeFi decentralized exchanges such as Uniswap or 0x.
Read more about the front-running issue and how to eliminate it in our article: Solutions to Impermanent Loss and Front-Running.
A list of attacks related to the smart contract gas cost appeared recently. Some of those are insufficient gas griefing or DoS with block gas limit. The description and code specifications might be found here.
A proper security audit of the smart contract will help you take care of all the potential threats and vulnerabilities and secure your protocol. Let us tell you more about the smart contracts auditing process and how exactly it helps.
HOW DOES BLAIZE CONDUCT A SMART CONTRACT AUDIT?
Over the years, the Blaize team has created an optimal smart contract audit process that allows us to detect all vulnerabilities, from tiny bugs to critical issues. Using this scheme, we’ve conducted 120+ smart contract audits for such companies as 1inch, PEAKDEFI, Aurora, and much more.
Here are the main stages of how we conduct a security audit for smart contracts:
- Code consistency check. We check the consistency between the functionality of the contract and its description in the Whitepaper and other supportive documents (like smart contract specifications).
- Undocumented features check.
- Test against the standard list of vulnerabilities.
- Detailed business logic review, search for deadlocks and backdoors or potential exploits.
- Preparation of the detailed schemes of user flows, an access control map, and a funds flow chart. It helps us find and describe edge cases of smart contract usage.
- Static analysis by automated tools.
- Unit tests coverage check and running a custom set of manual and exploratory tests.
- Gas usage analysis.
- Manual code review by at least two experienced auditors.
- Code quality and best practices review.
- Providing a detailed report of detected issues.
- Verification of fixes after providing consultations for the team.
- Final audit report preparation and publishing.
Blaize recommendation: We’d like to stress the importance of a clear and well-written smart contract specification. A clear description of all the smart contract functions and how the contracts should work together is a must for a high-quality audit.
Such things help prevent our team (and any other team of auditors) from misreading or misunderstanding your code and save you both time and money. Eventually, this helps you reduce the smart contract audit cost and get a top-notch review faster.
HOW DOES THE SMART CONTRACT TESTING PROCESS GO?
Before starting any smart contract audit, it is required to register the state of the audited system. If the code is stored on GitHub, then this is the commit number or the release version. Additionally, the checksum or hash is registered for each file to track any possible changes.
These steps are a prerequisite for a high-quality security audit. After that, Blaize experts choose the most suitable smart contract audit tools and begin the auditing process.
Our specialists have developed a set of specifications for measuring smart contract security levels to provide top-notch smart contract audit services.
| Critical | The system contains several issues ranked as very serious and dangerous for users and the secure work of the system. Needs immediate improvements and further checking. |
| High | The system contains a couple of serious issues, which lead to unreliable work of the system and might cause a huge data leak or loss of funds. Needs immediate improvements and further checking. |
| Medium | The system contains issues that may lead to a medium-sized data leak or loss of funds. Needs immediate improvements and further checking. |
| Low | The system contains several risks ranked as relatively small with a low impact on the users’ information and financial security. Needs improvements. |
| Lowest | The system does not contain any issues critical to the secure work of the system, but it is recommended to implement industry best practices on software security. |
All smart contracts are carefully audited according to those standards. Those are further explained and presented in the final report along with the recommendations for security improvements. Read: Smart Contract Adoption Benefits
APPROACHES TO SMART CONTRACT AUDIT
There are two approaches for auditing smart contract security – manual and automatic. Blaize developers are experts in both, aiming to ensure highly reliable results. Let’s see how to audit a smart contract in both ways and how they are different.
AUTOMATIC SMART CONTRACT SECURITY ANALYSIS
As smart contracts got more widespread and globally adopted, a lot of alternative software for bug detection emerged. Automatic analysis considerably fosters auditing smart contracts and detecting vulnerabilities and saves developers’ time. Yet, since there are a lot of false positive results from such security auditing tools, every artifact and result is checked and interpreted by the security auditor.
We will share more information on automatic smart contract auditing tools further in this article, so read on.
MANUAL SMART CONTRACT SECURITY ANALYSIS
Although the automatic approach is much faster and offers quite reliable results, sometimes it reports false positive errors, which are not necessarily code bugs. This happens because automatic tools cannot understand the code context, which people can get a perfect grasp of.
Yet, false positive errors are not a big issue as long as they can be easily identified. Automatic analysis detecting wrong contract vulnerabilities is a much bigger concern. That is why manual smart contract analysis is highly recommended.
A manual code analysis means the examination of each code line by a team of experienced developers. It works either as a check against a list of standard vulnerabilities or as a free “exploratory” check based on developers’ experience.
This approach is more complex and thorough. It helps to detect the most hidden problems that are located not in the code itself but in the contract logic and architecture.
Read Also: For a deep dive into blockchain security and to get insights from industry leaders, check out our article on the best blockchain security firm. It’s essential reading for anyone concerned about the integrity and safety of their blockchain projects.
SMART CONTRACT AUDIT COMMON MISTAKES
As you already know, smart contracts require not only good coding but also the ability to build flawless business logic that makes your contract cost-efficient. Since this feature might be often overlooked, one of the main stages of the smart contract audit process is to see how well your contract logic and architecture are designed.
SMART CONTRACT PERFORMANCE VALIDATION
Smart contract performance validation is a vital thing of a good security audit. Badly optimized contracts will always face delays and “eat” more gas, leading to higher costs.
Contract performance issues are often connected to the quality of the code. It mainly deals with some mistakes or the wrong order in the contract logic. If a contract is poorly optimized, it will often experience a wrong work of contract functions defined in the specifications. Later, it can be very hard to determine the problem because it will not be in the contract itself, yet on the edge of the contracts’ interaction.
Contact Blaize to conduct a full performance validation of your smart contracts.
Another important reason to check smart contract performance is contract upgradability. Although your contract works well today, it does not mean it will work the same way after performing any upgrade or adding a new feature. That is why conducting a security audit after any upgrades or improvements is crucial.
The seamless upgrade is a required feature in terms of developing smart contracts for DeFi projects. Smart contracts in DeFi should be highly operable and easily adaptable to any changes since they deal with users’ money.
If you want to know more about smart contracts development for DeFi or thinking of conducting an audit of such, check out some useful advice in our article: How to Develop a DeFi Project?
SMART CONTRACT GAS FEE OPTIMIZATION
One of the main challenges in today’s development is the reduction of gas fees within a protocol. The gas fee is the amount of ETH you should pay for contract deployment and maintenance. To get a pick at the estimated gas price for your contract, check for Ethereum gas fees here.
Gas fee depends and grows along with the smart contract complexity, so fee reduction is connected to the development of a more thoughtful smart contract logic.
A cost-efficient logic can perform main protocol tasks with a minimal amount of transactions used. That is why auditing smart contracts gas prices will help you save a great amount of money and optimize project development costs in general. Moreover, if a contract is well-written but not optimized in terms of gas fees, it will not be beneficial or even too expensive and impossible to deploy.
Remember: Smart contract performance validation and gas fee reduction should be well-considered long before the development process, while smart contract security audits help detect system vulnerabilities. Therefore, hiring a team of skilled smart contract developers is a must.
Find out more on how to choose a solid blockchain development company to avoid any uncertainty and achieve the best possible results.
WHAT DOES A SMART CONTRACT SECURITY AUDIT PROCESS COST?
There are quite a few factors that influence the final price of a smart contract security audit. Here’s a brief list for you to get a general idea:
- Scope of work. The more lines of code auditors have to review, the more you’ll need to pay.
- Complexity. Some smart contracts are pretty simple and only require to be checked according to OpenZepplin implementation, while others require meticulous manual review and a lot of additional custom tests. Obviously, the latter would cost more.
- Documentation. A piece of code without documentation takes more time to be reviewed since auditors have to understand business logic and what’s going on inside of smart contracts before performing a security check.
- Ready-made environment. Suppose the protocol only has the code and no related environment but is about to integrate into another DeFi project or has many parameters to be deployed. In this case, auditors would have to develop a custom environment first, prepare scripts, set up integrations, etc.
- Final scope. If developers keep making changes to the code during the audit, the review would take more time and cost more as well.
- Custom tests. As Blaize auditors fully cover the need of unit tests, existing sets can significantly decrease the duration of an audit. And even though auditors study existing tests and create new ones, your own unit tests can help them understand the context of the protocol better.
- Programming language. Some blockchain programming languages, such as Rust, are harder to review, which will also influence the smart contract audit cost and timeline.
BEST TOOLS TO CONDUCT A SMART CONTRACT SECURITY AUDIT
As we have mentioned above, there are many automatic smart contract auditing tools that can facilitate the auditing process. We’ve compiled a list of the most popular and efficient instruments for you to use to your advantage.
Mythril
Bug detection software determines which part is responsible for each input execution and shows where the possible bug occurs. Mythril is one of the tools Blaize experts use for automatic analysis.
Mythril is a very reliable software for contract security analysis. It is a perfect bug detection tool for Hedera, Ethereum, Quorum, Tron, and other EVM-compatible blockchains.
Slither
Another tool Blaize auditors often use is Sithler, a Python-based software that allows analyzing Solidy code with low false positives.
Since every project has a unique set of smart contracts, other tools should be used accordingly.
Scribble
Scribble is a specification language and runtime verification tool that translates high-level specifications into Solidity code. It allows for developing and checking Ethereum smart contracts with runtime verification and fuzzing.
Scribble helps developers annotate smart contracts with properties instead of writing them in a separate file. Upon completion, Scribble transforms annotations in the Scribble specification language into concrete assertions that verify the specification.
Echidna
Echidna is a Haskell program designed for fuzzing/property-based testing of Ethereum smart contracts. It uses sophisticated grammar-based fuzzing campaigns based on a contract ABI to falsify user-defined predicates or Solidity assertions.
Echidna was designed with modularity in mind, so it can be easily extended to include new mutations or test specific contracts in specific cases.
Vertigo
Vertigo is a mutation testing framework designed to work specifically for smart contracts. The system implements a range of mutation operators that are either selected from previous works or tailored to Solidity.
Conclusion
As you can see, a variety of nuances should be taken into account while building thoughtful smart contract logic. Conducting a smart contract security audit, for its part, helps to check the protocol’s logic, smart contract architecture, and all lines of the code to detect any vulnerabilities and potential threats.
Smart contract security audits help you identify potential risks and find the best way to mitigate them and boost the overall security of the protocol. Auditor’s recommendations are a valuable part of any report that can help you optimize smart contracts and build a truly secure product.
A number of recent events have proved that auditing smart contracts has to become a vital part of project deployment and launch. We highly recommend conducting several independent audits in order to ensure the highest level of security.
If you’d like to hire a reputable, experienced company to analyze your smart contracts, turn to Blaize. Our team has completed over 120 smart contract security audits over the course of 5 years. We analyzed 500K+ lines of code and found 250+ critical vulnerabilities that helped us save over $100M from hacking. Choose Blaize to boost your smart contract security!
FAQ
What is a smart contract audit?
A smart contracts security audit is an in-depth analysis of the protocol’s smart contracts, which includes automatic and manual testing, business logic analysis, a detailed review of the code against all known vulnerabilities, comprehensive recommendations on how to eliminate bugs and vulnerabilities, and much more.
How is a smart contract audit conducted?
Each team of auditors has its own smart contract audit process. Blaize experts stick to the following steps:
- code consistency check;
- undocumented features check;
- test against the standard list of vulnerabilities;
- detailed business logic review, search for deadlocks and backdoors or potential exploits;
- preparation of the detailed schemes of user flows, access control map and funds flow chart;
- static analysis by automated tools;
- unit tests coverage check and running a custom set of manual and exploratory tests;
- gas usage analysis;
- manual code review by at least two experienced auditors;
- code quality and best practices review;
- providing a detailed report of detected issues;
- verification of fixes after providing consultations for the team;
- final audit report preparation and publishing.
Where can I find developers to audit my smart contract?
You can hire Blaize – an experienced team of blockchain developers, analytics and auditors who have conducted over 120 smart contract security audits in 5 years. We have reviewed 500K+ lines of code and saved more than $100M from hacking attacks.
What is the timeline for a smart contract security audit?
The timeline depends on the project, its complexity, provided documentation, existing unit tests, and much more.
How much does a security audit cost?
A smart contract audit cost depends on many factors, including the scope of work, code complexity, the programming language used for smart contract development, documentation, ready-made environment, etc.
If you’d like to find out how much a smart contract security audit would cost for your project, contact our team so that we can provide you with custom calculations.