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After Vitalik Buterin introduced the Ethereum concept, smart contracts rose to the top of the blockchain technological hierarchy.
Despite being implemented on Bitcoin, smart contracts had a minimal reach. Today, practically every industry has access to a blockchain network, enabling secure transactions without needing a third party.
Although, it looks tempting as it removes the need for middleman participation. Smart contracts are not barred from vulnerabilities that make them susceptible to financial threats and hacking. This calls for a third-party audit to ensure that smart contracts perform as per their intended behavior and are deployed in a bug-free manner.
This article will discuss smart contract audit companies, their functioning, and the traits that make them reliable.
What are Smart Contract Audit Companies?
A smart contract audit company seeks to ensure that a contract is implemented on a blockchain system securely and without errors.
They are composed of experienced teams of Web3.0 developers and auditors who examine your contracts and look for any potential weaknesses.
Smart contract audit firms can be broadly categorized into three types:
How Does a Smart Contract Audit Firm Work?
Usually, a smart contract audit firm deploys a number of audit techniques, including manual and automated techniques. To delve into the working of a smart contract audit firm, one needs to understand how a smart contract audit works.
On the one hand, mostly smart contract auditing is a fairly standardized process among audit providers, but still, their approach can be slightly variable.
Primarily, the following are the steps involved in the smart contract audit process:
- Requirement gathering to determine the audit scope, intended business behavior, overall architecture, and project goal.
- Providing an estimated smart contract audit cost for the project in question.
- Run testing is probably the central aspect of auditing, and it certainly depends on the auditing firm, techniques, and analysis tools deployed.
- Prepare a preliminary report with the errors detected and submit it to the project team for comments and further corrections.
- Usually succeeding in the code refactoring, the team took to resolve the issues identified and publish the final report.
Traits of a Good Smart Contract Audit Company?
Audits aim to expose a smart contract’s vulnerabilities. It aids projects to stay ahead of a hacker’s attack, security breaches, and other cyber threats putting a business’s security and finances in line.
Following are a few traits that you must look at before handling your project for a third-party review.
- Portfolio and track record of finding flaws
Undoubtedly, the portfolio of a company offering blockchain security services serves as a mirror of its functionality.
But make sure it’s real!
Verify their past experiences and evaluate their track record for bug findings to ensure your security is in safe hands.
- Use integrated manual and automated testing techniques.
Manual testing is a cumbersome, time-consuming, and expensive process but usually offers enhanced effectiveness to the auditing process.
It is advisable to opt for a firm that applies an amalgamated version of automated and manual techniques to expose smart contract vulnerabilities to a greater extent.
- Detailed Analysis Report
Reporting must be done in at least two stages, firstly, after initial auditing and subsequent to code refactoring by the project developer.
This allows the developer to re-verify the working of the smart contract after making the required changes recommended by the best crypto auditors. The reports must list the issues categorized by severity levels and issue status, to be resolved before final reporting.
- Transparent Auditing Process
The auditing process offering smart contract security must be done transparently, taking the recognition of the project developers.
In fact, transparency must flow mutually between the project and auditors to ensure complete compliance with the security.
- Cost-effective Auditing solution
Probably, the first question asked by a project team is the cost incurred in auditing a smart contract.
The exact cost of the audit varies with its type, complexities involved, the level of documentation provided by the developer to understand the business logic, and the auditing firm. Although on average, auditing might cost around $(5000-15000).
Is a Smart Contract Auditing Firm Necessary To Hire?
Given that smart contract, adoption is irreversible, businesses concerned about the correctness of their projects are real. Due to security flaws in smart contracts, you also run the danger of losing the entire contract and all associated assets.
The following reasons make the smart contract audit a crucial requirement today.
- Optimized code
- The enhanced functionality of smart contracts
- Improved wallet and financial security
- protection from hacking attacks
Therefore, it is evident that smart contract audits might be beneficial for:
- The developers of DApps, Defi, NFTs, and more.
- People who need to win the confidence of contributors, investors, stakeholders, and others
- ICO startup creators and organizers
- Intelligent contract creators
Security is one of the major issues facing the adoption of smart contracts today. Implementing smart contracts on a blockchain network could incur astronomically high additional costs due to worries about inefficiencies, security risks, and improper conduct.
Due to the immutable nature of blockchain technology, it is impossible to edit the code after deploying it. Placing smart contracts without performing sufficient audits may result in unwanted circumstances, such as variations from the contract’s intended performance. Inadequate auditing procedures might also expose you to hazards like losing personal information or experiencing data theft.