While many technologies have been established over the years and are used again and again, new ones are constantly being developed to solve existing problems or find more elegant solutions. One of these solutions, which has gained enormously in importance and above all fame in recent years, is the blockchain. It can be described in the simplest way as a kind of distributed database, which is not managed centrally on a server, but exists decentralized via a so-called peer-to-peer protocol simultaneously on the computer of each participant in the network. The protocol also ensures that although every participant is allowed to add records, nobody can remove them, which is described as "immutability". Since even program code (so-called smart contracts) can now be stored and operated in the blockchain, these programs cannot be changed there either. In the past, this has already led several times to third parties discovering errors in Smart Contracts, misusing them for their own purposes and thus stealing several million euros of financial assets. Prominent examples of this were "The DAO” Hack
from 2016 or Parity’s Multi-Sig Hack
What Is a Smart Contract Audit?
Since the blockchain as a technological tool is a unique and important solution on which many companies and start-ups will build in the future, it is of utmost importance and in all our interests that the program code of these Smart Contracts meets the highest standards and is thoroughly tested before it is used.
A so-called Smart Contract Audit is a common means of counteracting the above-mentioned risks. Here, the program code of the Smart Contract is checked and analysed by a team of experts for possible errors and weaknesses. In many cases, the protocol which implements this Smart Contract is also examined with regard to game theory models and other mechanisms.
The Advantages of an Audit
This approach serves several purposes at once. In addition to the other pair of eyes that look at the program code and provide external feedback, it often also sheds light on areas and aspects of the Smart Contracts that are often not sufficiently considered during the development itself. This is perfectly normal: a professional auditor always has a slightly different and sharpened view on things like bugs or known vulnerabilities, which are often not a priority for a developer during development.
Another great advantage of an audit is the confidence of the users. Especially experienced users usually expect from a block chain project that they can present a professional audit of their smart contracts before they consider using them. New and unknown projects in particular can often significantly reduce the entry hurdle for potential users in terms of trust through a professional audit.
Manual or automated?
While today there is a big trend towards automation, there are still processes where a manual approach is advantageous. Although there are already tools that promise an automated check of Smart Contracts and detect both errors and weaknesses, they are still far from being able to replace a professional audit by an expert. In practice, however, it has proven to be sensible to use both methods in parallel in order to make the best possible use of the advantages of both methods. While the automated tool can often detect programmatic errors, humans, on the other hand, find logic and protocol errors more easily.
As a leading software testing as a service provider, we also offer smart contract audits for blockchain projects with ditCraft. Our experts with many years of experience in the areas of smart contract programming, protocol development and the design of game-theoretical incentivization models are happy to help you to bring your smart contracts up to the latest state of the art and prevent security vulnerabilities. Together we will define the scope of the audit and advise you extensively on the methods and tools used. Since no block chain project is like any other, we are happy to meet your special wishes and develop the perfect audit strategy together with you. Finally, you will receive a comprehensive report on the results of your audit, which you are welcome to share publicly if you wish.