Smart Contract Auditing
According to recent reports show that a massive amount of nearly $79.6 billion has been lost due to different issues in the cryptocurrency world.
The fast-growing field of blockchain technology, especially smart contracts, is driving various applications in areas like DeFi, but it also raises concerns about safety.
First, let’s look at some basic things about these self-operating smart contracts that make them vulnerable:
- Smart contracts are open for anyone on the network to see and find problems or weaknesses.
- Even commonly used third-party tools or in that case external smart contracts can have weaknesses that can be added into the contract where these tools are used.
- Decentralized finance (DeFi) applications generally have complex smart contracts, which makes them vulnerable to errors leading to exploits.
- Another factor responsible for vulnerabilities is oracle. The inaccurate oracles can introduce the vulnerabilities in smart contract.
However, as more people use smart contracts, it’s important to have strong security measures to deal with vulnerabilities. This is where smart contract auditing come in.
Smart contract auditing is the process of analyzing and assessing the code of a smart contract to identify potential security vulnerabilities and ensure its reliability, correctness, and efficiency.
Smart contract reviews involve verifying the code of a smart contract to find possible security problems. By doing reviews, developers and companies can find and fix problems before putting the contract on the blockchain. This helps prevent possible problems and financial losses.
Types of Smart Contract Auditing:
1. Manual Auditing
- Manual auditing involves auditors thoroughly reviewing the smart contract’s code line by line to identify vulnerabilities manually.
- This method relies on the expertise and experience of auditors to uncover complex issues that automated tools might not have captured.
- It is a comprehensive, it can be time-consuming and expensive process.
2. Automated Auditing
- Automated auditing utilizes specialized software tools designed to analyze smart contract code automatically.
- Various techniques employed in this method includes: static analysis and symbolic execution etc.
Static analysis is a process of analyzing or scanning smart contract code to detect security vulnerabilities without actually running the code.
Symbolic execution is a technique used to analyze the behavior of smart contracts without executing them on a real blockchain network. Instead of running the contract with actual inputs, symbolic execution involves working with symbolic values that represent potential inputs and program states.
- It is less time consuming and requires less effort for auditing, making it more cost-effective.
Smart Contract Auditing Process
Refer below image to understand smart contract auditing process.
Common Tools for Smart Contract Auditing:
- Mythril
- Mythril is a free and open-source smart contract security analyzer for EVM bytecode.
- It uses symbolic execution to detect a variety of security vulnerabilities.
- Provides APIs to integrate/implement custom vulnerability detectors.
- Can be integrated with pipelines and development environments like hardhat.
- Supports contracts written with Solidity >= 0.4
- Its able to detect cross contract vulnerabilities as its a dynamic analysis tool.
- Mythril is easy to use tool.
2. Slither
- Slither is an open-source static analysis tool designed for Solidity & Vyper smart contracts.
- It uses static code analysis to detect a variety of security vulnerabilities.
- Provides more then 90+ inbuild detectors and also provides visualization tools.
- Provides APIs to integrate/implement custom vulnerability detectors.
- Can be integrated with continuous integration and Hardhat/Foundry builds.
- Supports contracts written with Solidity >= 0.4
- Slither is fast and easy to use tool.
- Currently unable to detect the vulnerabilities which can occur due to cross contract calls.
3. Echidna
- Echidna is a property-based fuzzer that can generate inputs to smart contracts to test for vulnerabilities.
Fuzzing or fuzz testing is technique in which the functions of a smart contract are called with unexpected and random inputs which can help to detect vulnerabilities in smart contract.
- Can be invoked with Hardhat/Truffle builds.
- Contracts containing external 3rd party libraries are not yet fully supported, echidna provides very little support in such cases.
- Echidna is slow but easy to use tool.
Conclusion:
Smart contract auditing plays an important role in ensuring the security and reliability of blockchain-based applications. Smart contract auditing allows to identify and address vulnerabilities before deployment, which helps in reducing the risk of financial losses, reputation damage. Developer should incorporate auditing via manual review or automated analysis using specialized tools like Mythril, Slither, and Echidna.
