Let's assume that you have created your company and prepared the necessary documentation. Auditing companies check and issue an authoritative conclusion: how well the documentation is drawn up and whether your company can be trusted. A similar model works in the world of cryptocurrencies. Each company creates a virtual infrastructure for its project. And it's called a smart contract. In fact, this is a program code on the basis of which the very idea of the project works. It can be an exchange, an exchanger, a cryptocurrency bridge, an aggregator, an investment fund, and much more.
Smart contracts are actively used in the blockchain environment and make it possible to completely eliminate fraudulent actions or violations in contracts between parties to different processes. Existing algorithms have a sufficiently high reliability, due to which the need for intermediaries disappears, and any transaction becomes as transparent as possible.
Despite their reliability, smart contracts are often hacked, resulting in financial or reputational losses. Problems can arise due to two factors: code imperfection and human error.
In the crypto industry, theft of funds from users of cryptocurrency projects is constantly happening.
Why does this happen when smart contracts are considered one of the most secure methods of managing funds today? Despite their perfection, hackers are also on the alert. They become more resourceful as contracts become more complex. As the saying goes, “blockchain is secure, but blockchain applications are not always secure.”It is in order to combat this and prevent such cases that there are audits of smart contracts, which have recently been gaining more and more popularity.
Auditing companies analyze the contract code, then draw up a report and send it to the project. In turn, projects can make the report public. Audits are most popular in the field of decentralized finance, since the investor's decision to make a deposit is based on audits of the project's smart contract.
The audit includes four stages:
- Initial manual and automatic contact analysis;
- If a bug is found, it is urgently reported to the developers to fix it;
- Developers are fixing the bug;
- The auditors check the code again and if nothing is found, they make a report.
The slightest mistake in the code can lead to huge losses. Therefore, the auditors imitate hacker attacks several times and try to hack the smart contract on their own.A typical smart contract audit includes an analysis of the specification and accompanying documentation, which explains the principle of the project architecture; testing and searching for major flaws, automated analysis using special software.
But the main thing is, of course, manual analysis. It is this process that allows you to determine how the code corresponds to the declared functionality.
What Problems Does a Smart Contract Audit Solve?
Decentralized applications, whether they are DeFi, blockchain projects or smart contracts, due to their decentralized nature and the absence of a regulatory party, have disadvantages that allow them to freeze part of the funds of users or developers inside the blockchain without the possibility of recovery.
This can be compared to a bank transaction sent to the wrong details. But in the case of a bank, you know for sure that by calling the bank you can remedy the situation. In addition, banks guarantee the security of their applications, minimizing the possibility of losing personal finances.
In the case of smart contracts and blockchain applications, such a central regulator does not exist. Therefore, the contract published in the blockchain network starts to work independently. Therefore, it is extremely important to know that the contract code is error-free and will not allow your funds to disappear without a trace. This is what is checked during the audit. In addition, the creators of the contract may not be honest in its design by adding an action code that will allow them to steal users' funds outside of the algorithm.
An audit helps to find not only critical, but also more common errors in smart contracts. For example, problems with integer arithmetic, a block gas limit vulnerability when an array overflows, missing parameters or preconditions (the result of careless development), potential front-running (overtaking an unconfirmed transaction), as well as a great many logical flaws.
All of these can only be discovered if the auditor fully understands the architecture of the codebase and has an understanding of the intended functionality of the project and the contract specification. Experts note that this is why the audit of smart contracts takes time, requires certain costs and the participation of highly qualified specialists.
Our team are experts in the world of cryptocurrencies and blockchain technologies with the perfect combination of knowledge and experience. For several years, we have been developing our own projects and creating crypto projects for our clients, so we understand all the intricacies of working with smart contracts.
Boosty Labs is one of the best smart contract audit companies. Our blockchain experts use their experience and skills to audit smart contracts for any possible or existing errors, security checks, compilation issues, etc.
We conduct a full code review for weaknesses and security vulnerabilities. Our team also checks the efficiency and optimization of the smart contract. This allows you to detect inefficient code elements and significantly reduce transaction fees.
