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How to audit a smart contract? Who does it best?

Security of the finances and the application’s credibility are crucial requirements for every reputable blockchain platform or application.

Numerous vulnerabilities throughout the years have shown how terrible it can be to let application security or integrity slip. Decentralized blockchain apps are powered by smart contracts — a code that cannot be changed after implementation.

Any application needs these smart contracts to work, and their effectiveness decides whether or not the application performs as planned.

This is why smart contract audits are so important ‒ they ensure the integrity and security of code while also adding to your platform’s credibility.

How to get ready for a smart contract audit?

It is in the project team’s interest to ensure that their blockchain application works without errors and security vulnerabilities. This is when the company hires an audit team.

Regardless of years of experience, using a checklist is the best method to approach the audit processes professionally. The checklist guarantees that the auditor doesn’t overlook anything crucial and gives essential assistance and feedback to the development team.

The audit can be split into a few vital phases.

Getting to know the project

The first phase is all about requesting the main information and documentation on the project from the development team. This includes:

  • databases or libraries used;
  • technologies;
  • whitepaper.

The main requirement for the development team at this stage is to provide all of the necessary information conveniently and comprehensively.

Building an environment for development

The audit team will build a development environment with all essential software packages to meet the project’s technical settings, armed with the information supplied by the project development team.

Receiving the source code

Now that the development environment is configured, it is time to inspect the project’s code. In lieu of any widely used repositories, it is desirable to ask the project creators to grant the team access to the code. The client should preferably deliver a compact codebase with suitable formatting set up in accordance with standards for simple comprehension.

To improve the performance of the code and successfully discover any errors, it is in the project team’s interest to provide as many sources to the audit team as possible.

Creating the scope of the audit

Every audit is unique ‒ some companies ask to audit the whole project, while others ask to focus on a certain part of it. This is why audit teams create and verify an audit scope first ‒ think of it as a blueprint for further actions.

This document usually includes links to the repositories used, the branch name, the auditor responsible for the section, and the file path to contracts that need this audit.

Checking technical requirements

Usually, all of the technical requirements are set in the first phase, when the project’s team provides all the necessary information. The only difference is that the audit team creates a specific checklist where every smart contract function has its technical and functional audit requirements met ‒ a structured system for each smart contract.

The majority of projects use multiple smart contracts. Hence, cross-contact dependencies are inevitable. Auditors should track these dependencies and see how they affect other smart contracts. Additionally, auditors ensure that the project team provides these models of cross-contract relationships and descriptions of system roles as comprehensively as possible.

Performing unit tests

Audits of smart contracts require exhaustively putting the contracts through all conceivable situations. The audit team often develops its own test cases, although it can additionally use unit tests from the development team.

These tests will essentially contribute to extra approvals by assisting the auditors in viewing the contracts from the standpoint of a developer.

Finally, the team will start by going over every line of code before subjecting the contracts to a number of manual and automated tests. The audit team will next examine the generated data for errors and grade them according to their severity.

After a thorough analysis, the audit report will provide suggestions for issue fixes and other required adjustments to improve the smart contracts’ security and overall performance.

The evaluations of a project in an audit report take into account more than simply the code. The project’s success is also dependent on its documentation integrity, use of recommended coding practices, the effectiveness of communications, and other elements, including the human factor.

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