Why Audit Your Smart Contract?
Why Audit Your Smart Contract?
Smart contracts are important for many reasons. They assist you in streamlining and automating your business procedures to save time and money.

Smart contracts are important for many reasons. They assist you in streamlining and automating your business procedures to save time and money. But the main reason it's so well-liked is that it lowers the possibility of fraud by eliminating human mistake. These advantages are not without cost, though, as it is simple to commit errors while creating smart contracts. A flawed codebase can bring down your entire system and even make it vulnerable to hackers! You may have heard about hacking incidents. You may have heard about Ethereum-based tokens getting hacked. These hacks were due to vulnerabilities in smart contracts, which allowed hackers to steal millions of dollars worth of cryptocurrencies stored in those contracts.


How to start an audit

Conducting a security evaluation should come before an audit. In order to identify any issues and loopholes in the smart contract.


The next stage is to comprehend the contract's business logic. You should know why the contract was made, what issue it resolves for the user, and how it interacts with other contracts on the blockchain.


This is followed by technical architectural analysis: looking at all the parts involved in writing and deploying this code, and understanding how they are implemented in a programming language such as Solidity.


Finally, threat modeling is done to see how different actors (users/end users) interact with the system.


Different Stages of Smart Contract Auditing

The various phases of smart contract auditing consist of:


Determine the audit objectives and objectives:

The goals and objectives of the smart contract audit must be established in this stage.


Determine the scope of the audit:

To make sure nothing is overlooked, you gather all assets covered by the audit's purview in this stage.


Audit plan:

Planning is a crucial step in an audit since it enables efficient completion of the audit.


To audit:

Trying to uncover problems in the smart contract code is real work.


Write audit report:

It's time to report on what you discovered throughout the audit now that all of your hard work is over.


General aspects of testing

There are many different types of tests, but the most important thing to remember is that you should not trust code that you have not tested. There are several ways you can test your smart contract code, including:


Test in a sandbox environment (like Remix)

Test on a testnet such as Rinkeby

A private blockchain network (such as Ganache) specifically designed for testing purposes


Basic Safety Considerations

As a smart contract developer, it is your responsibility to ensure code security. You can only do this to protect your users' money.

To ensure proper safety, there are some basic practices that must be followed. These include:

Use safe coding practices

Use a secure development environment


Common Ethereum Vulnerabilities

Smart contracts on Ethereum are susceptible to some hacking and attacks. The most common vulnerabilities are:


Reentrant: This describes how a malicious contract may repeatedly call a victim contract, using up all of its resources in the process.

Overflowing or under flowing integers are caused by arithmetic operations with values outside of the predicted range. This can be used to deliver ETH inadvertently in excess of or insufficiently.

Dependent on timestamp: In this case, the contract bases certain decisions on the current timestamp. This can be used to alter the contract's current status.

Following are some frequent vulnerability that will be covered. You can also check out my other articles to learn more about reentrancy and integer overflow/underflow vulnerabilities.


Stored Variable Vulnerabilities

One of the most common security flaws in Ethereum smart contracts is the use of insecure storage variables. These variables can be used to store sensitive information such as private keys and passwords, which can be easily compromised if not properly secured.


There are several different ways to protect stored variables, such as using a library like SafeMath (Solidity has built-in SafeMath since 0.8), which ensures that all mathematical operations are performed in a safe manner.


Other methods include using hardware security modules (HSMs) to store variables, or using multi-signature wallets to protect private keys. Utilizing a mix of these techniques is the best approach to guard against storage vulnerabilities because each has advantages and disadvantages of its own. By using multiple layers of security, it becomes more difficult for an attacker to compromise the data stored in a smart contract.


Misuse of Transfer and Send

There are a few crucial points to remember when it comes to smart contracts in order to prevent any misuse. First and foremost, it's crucial to keep in mind that smart contracts cannot be changed. This implies that they cannot be modified after being used. Therefore, it is crucial to double and triple check your code before deploying it.


Confusion between the transfer and transmit functions is a frequent error that can result in improper use of smart contracts. Though they appear to be identical, these two operations serve quite distinct purposes. While the send function is used to deliver assets, transfer may be used to transfer ownership.


In other words, using smart contracts improperly might have grave repercussions. Before deploying your code, be sure to double check and make sure you understand the difference between the transfers and send functions.


Function Visibility Vulnerabilities

When it comes to the visibility of functions in smart contracts, there are mainly two types of vulnerabilities that can occur. The first type of vulnerability is when a function that should not be public is marked as public. This may occur if the function's visibility is unintentionally set to public or if it is not correctly declared as private. Anyone with access to the contract can take advantage of this sort of vulnerability, which could lead to the contract being breached.


When a function is made private when it shouldn't be, that is the second kind of vulnerability. This may occur if the visibility is incorrectly marked as private or mistakenly set to private. Anyone with access to the contract can take advantage of this sort of vulnerability, which could lead to the contract being breached.


Integer Arithmetic Errors

Watch out for integer arithmetic mistakes while designing smart contracts. When you execute computations using integers that are either too large or too tiny, these mistakes happen.


Consider the scenario when you are attempting to determine the total worth of all tokens within a smart contract. Each token's value is saved as an integer. The overall value of the contract will be too enormous to be adequately represented by a single integer variable if there are more than 2,147,483,647 tokens in it. An error will result from this.


Use a library like SafeMath, which Solidity has integrated since version 0.8, to do integer arithmetic securely, to prevent this from happening.