What is a Smart Contract Audit? A 5-Minute Complete Guide

Smart Contract Audit is the review of code by developers to resolve if the code is secure acting as whether there are any existing vulnerabilities, capabilities for future bugs, or any errors in coding that could expose users.

Smart contracts are just like contracts in the real world.

The only difference is that they are completely digital.

In fact, a smart contract is actually a tiny computer program that is stored inside a blockchain.

Smart contracts are stored on a blockchain, they inherit some interesting properties.

They are : Immutable and Irreversible

• Immutable – Being immutable means that once a smart contract is created, it can never be changed again. So no one can go behind your back and tamper with the code of your contract.
• Irreversible – Transactions cannot be reverted.

Now, Smart contract audit is an assessment of the secure development process.

It is a thorough analysis of blockchain applications smart contracts in order to correct design issues, errors in the code, or security vulnerabilities.

For a professional audit, for Smart contracts, exchanges, Defi Dex, and Dapps, CrypticOcean provides you with the best security solution for your smart contracts and Dapps.

Why do we need a Smart Contract Audit?

The below list of known attacks which you should be knowledgeable, and need to defend against when writing smart contracts:

• Race Condition: A race condition is an undesirable situation that occurs when a device or system attempts to perform two or more operations at the same time, but because of the nature of the device or system, the operations must be done in the proper sequence to be done correctly.
• Reentrancy: In computing, a computer program is called reentrant if multiple invocations can safely run concurrently.

The concept applies even on a single processor system, where a reentrant procedure can be interrupted in the middle of its execution and then safely be called again (“re-entered”) before its previous invocations complete execution.

The interruption could be caused by an internal action such as a jump or call, or by an external action such as an interrupt or signal.

• Cross-function race condition: A cross-function race condition occurs when two functions are called and share the same state. The contract is tricked into thinking that two contract states exist when in reality there is only one true contract state that can exists
• Transaction-Ordering Dependence (TOD) / Front Running: Transaction Order Dependence is a type of race condition inherent to Blockchains and relies on the fact that the order of transactions themselves can be easily manipulated.

A possible way to fix race conditions is by submitting information in exchange for a reward. This is called a commit reveal hash scheme.

• Timestamp Dependence: The timestamp dependency vulnerability exists when a smart contract uses the block timestamp as part of the conditions to perform a critical operation (e.g., sending ether) or as the source of entropy to generate random numbers.
• Integer Overflow and Underflow : Overflow: Basically an integer is a region in memory capable of holding values with size up to four bytes. However, if the integer value used is less than the minimum signed or unsigned int. This is called an underflow and will also trigger a segmentation fault.
• DoS with (Unexpected) revert: This vulnerability appeared in the King of the Ether smart contract.

In this case, an attacker’s contract could first claim leadership by sending enough ether to an insecure contract.

Then, the transactions of another player who would attempt to claim leadership would throw due to line 25 in the above snippet.

Although a simple attack, this causes a permanent denial of service to the contract rendering it useless.

This can be found in other Ponzi scheme contracts that follow the same pattern.

• DoS with Block Gas Limit: If the attack succeeds, no other transactions will be included in the block. A Block Stuffing attack can be used on any contract requiring action within a certain time period.

However, as with any attack, it is only profitable when the expected reward exceeds its cost.

• Forcibly Sending Ether to a Contract: It is possible to forcibly send Ether to a contract without triggering its fallback function. This is an important consideration when placing important logic in the fallback function or making calculations based on a contract’s balance.

Smart Contract Audit Process at Crypticocean

For Smart Contract Audit, exchanges, DeFiDex, and Dapps –

CrypticOcean provides you with the best security solution for your Smart Contract Audit and Dapps.

Here’s the following process :

• Step 1. Contact us:

Cryptic Ocean is a blockchain technology company that provides end-to-end blockchain development and blockchain consulting services to multiple business domains.

Our goal is to help companies adopt new technologies and simplify complicated issues that arise during technology evolution.

Contact us for the best solutions about the use of blockchain technology to solve the toughest challenges faced by the world today.

• Step 2. Gathering info about your Code:

We will review your smart contracts code or Dapp architecture based on the line of code, code complexity, and business logic.

• Step 3. Quotation:

The client comes on the websites, fills up the form, and gives the quotation. He agrees on the initial payment and gives the pricing of the security audit.

• Step 4. Audit :

Audit process start as-:

1. Manual review: In this step, our smart contract auditors will review your smart contract manually and find out possible the known vulnerabilities in your smart contract like a race condition, reentrancy
2. Manual Testing: In this step, our auditors perform all the possible transactions on remix IDE all the transactions will be recorded.
3. Unit testing: We will create multiple scenarios to check if the results are the same as we expected along with business logic and all the security checks we will cover.
4. Automation testing: We use some in house and 3rd party tools for audit process like Echidna, manticore, slither, mythx, Surya
5. Coverage report: Coverage report will let us know how efficient our unit testing is.
6. Recommendations and suggestions: Based on our expert’s review we will guide you to optimize your smart contract based on a line of code, security aspects, gas optimization and other important suggestions and recommendations for your use case
7. Initial Audit report: Initial audit report with all the highlighted issues if any in the smart contract will be delivered to you.
8. Code fixing and the cycle is repeated two times.

Why can you trust Cryptic Ocean’s security audit?

Here’s an outline of specific solutions that our security audit covers:-

We evaluate the flow of data within your business – Data is one of your key assets that requires top security controls.

Smart Contract Audit auditors determine the type of information you have, how it flows in and out of your organization, and who has access to that information.

Identifies vulnerable points and problem areas – Our Expert outsourcing services can pinpoint if there’s any potential problem area in your system through a number of ways.

We can check if your hardware or software tools are configured and working properly.

Also retrace security incidents from the past that might have exposed your security’s weak points

It determines whether you must alter security policies and standards or not. – The auditing process starts with the pre-audit, where auditors obtain relevant documentation about previous audits, as well as copies of current policies and procedures.

Afterward, they analyze and test your entire system on-site.

Conclusion

Cryptic Ocean is a blockchain technology company that provides end-to-end blockchain development and blockchain consulting services to multiple business domains.

Our goal is to help companies adopt new technologies and simplify complicated issues that arise during technology evolution.

Contact us for the best solutions about the use of blockchain technology to solve the toughest challenges faced by the world today.

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