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Ethereum, launched in July 2015, is now the second-largest cryptocurrency after Bitcoin and the largest smart contract developing platform in the world. After the recent crypto crash, the value of ETH is now back to the $2000+ level, once again making it one of the many desirable assets!
Smart contracts are all the rage now, however, they were once non-existent. Ethereum was the first to introduce smart contracts at a wider community level. It still is the most advanced platform for the coding and processing of smart contracts. This open-source platform has one of the largest networks of developers, and this is the reason, it can keep up with the continually changing and growing environment in the blockchain industry.
With the launch of Ethereum 2.0, it is certain that its popularity will reach new heights. Currently, the Ethereum 2.0 upgrade is estimated to deliver its Phase 1 some time in 2021, which will break down the single Ethereum Blockchain into 64 shard chains, allowing parallel processing and thus, solving the lingering issue of scalability.
In this blog, let’s take a deep dive into the know-how of Ethereum smart contract auditing!
Ethereum Smart Contract: An Introduction
Smart contracts in themselves are not alien to anyone active in the crypto space. However, with so many smart contract processing blockchains, it may get a little overwhelming to pick a favorite. Well, that’s exactly what we’re here for.
Smart contracts are a type of Ethereum account, meaning they have a balance and can send transactions over the network. However they’re not controlled by any specific user, instead, they are deployed to the network and run as a computer program. User accounts can then interact with a smart contract by submitting transactions that execute a function defined on the smart contract. Smart contracts can define a set of rules, similar to any regular contract, and automatically enforce them via the code.
Need For an Ethereum Smart Contract Audit
Given those organizations like Ethereum that allow developers low-cost access to their services, anyone can now tap into the power of smart contracts. It is for this very reason that smart contracts are regarded as the most exciting area of blockchain technology implementation.
However, this technology is not without its challenges. One of the biggest issues is the need to properly audit smart contracts to ensure maximum risk assessment and that there are no security issues to tamper with its performance. Some of the commonly known vulnerabilities that have troubled developers are- timestamp dependence, front-running, re-entrancy, DoS attacks, insufficient gas issues, and many more. To read more about these vulnerabilities in detail, check out our series on Smart Contract Bugs.
These vulnerabilities have been the reason behind the biggest hacks in the history of cryptos, such as the DAO hack, the KuCoin Hack, the Coincheck incident, and many others, the list is never-ending. One can never be too cautious with crypto!
What you can do is, get your smart contract audited!
An audit not only prevents any future hacks but also provides you with recommendations on how to make your code better and optimize its performance. Let’s take a look at how an Ethereum smart contract audit is carried out!
Recommend for Ethereum Smart Contract Security Audit
How Does an Ethereum Smart Contract Audit work?
An Ethereum Security audit is not too different from any other decentralized application’s audit. The audit is to be done in such a way that it encompasses all the possible testing scenarios and observes every potential bug.
Following are the phases that are an integral part of a smart contract audit-
1. Project Familiarization
Before digging into the code, the auditors will want to sit with the development team to understand the underlying architecture and intended behavior of the smart contract. Whitepapers and detailed documentation prove to be quite helpful in this phase.
2. Code Review
In the code review step, the auditing team will look more closely into the code for a complete understanding. This can include the design and which libraries the developers used, checking the test coverage, and how the project is intended to function.
3. Automated Analysis
Concerning certain business logic, auditors conduct automated assessments using dynamic analysis tools such as— MyThrill, Hyperledger Caliper, Manticore, etc. In the initial steps, identification of bugs in the test suite that is critical to the application is highly advisable.
4. Manual Analysis / Functional Analysis
Automated analysis sometimes reports false positives, which is why it is always a good practice to manually review the code. It also applies the usual software guidelines such as commenting code, code structure, naming variables, and the avoidance of replicated code.
5. Known Vulnerability Analysis
For an audit to be called a “smart” audit, this step becomes an ultimate necessity. Some vulnerabilities surface time and again in the crypto-world, thus it seems only wise to separately test for them. These known vulnerabilities include— re-entrancy, gas limit issues, timestamp dependencies, and others.
6. Initial Audit Report
After all these steps are completed, auditors will combine the findings and recommendations in a report for the client to review.
7. Code Fixes
After the first audit report, developers make the necessary changes and fixes to the code and turn it up again for a final review by the auditors.
8. Final Audit Report
After all the fixes are done, auditors combine all the details and analysis into a report and submit it to the client.
These phases may adopt a different name depending on the auditing team but are a must to be followed during the audit.
Being popular has its own cons and Ethereum, ranking right after Bitcoin, is definitely on the radar of malicious entities! The attacks and scams in the history of crypto and blockchain have taught us one very crucial thing there is no bigger mistake than deploying an unaudited code on the mainnet. One can never fathom the extent of loss caused by the tiniest of backdoor vulnerabilities present in a smart contract.
Do not make this mistake. Get your smart contract audited before launching on the mainnet! At ImmuneBytes, we ensure maximum security by employing the latest tools and technology to audit your smart contract. Our audits are custom-built with an expansive range of test suites for you and your project only!
ImmuneBytes is facilitating blockchain security by employing the use of cutting-edge techniques on smart contracts and decentralized applications. We have a team of experienced security professionals who are adept at their niches and provide you with innovative solutions and consultation. So far we have worked on 175+ blockchain start-ups on different blockchain frameworks, with clients spread across the globe, and are continually unfolding ourselves to make this decentralized movement thrive.