Looking for a smart contract audit? Explore real-world case studies, best practices, platform-specific guidance, and more
Smart contracts are the powerhouse of blockchain technology. They are code stored on a blockchain, executing when specific conditions are fulfilled. After completion, transactions are traceable and cannot be reversed. They automate agreements, ensuring instant certainty for participants without intermediaries or delays. Additionally, they can automate a workflow only to move forward when certain criteria are met.
Smart contracts revolutionized blockchain, enabling different applications, even in conservative sectors. Yet, there are security concerns. Security issues in DeFi usually arise from smart contract weaknesses rather than hacker skills. Chainalysis reports that the DeFi sector saw the theft of tokens valued at over $1 billion in 2023 alone.
Smart contract audits play a critical role in blockchain risk management. By thoroughly reviewing and testing smart contracts, audits identify vulnerabilities and ensure code reliability. Complex smart contracts and high stakes make thorough audits essential, ensuring trust in blockchain systems for stakeholders and users.
Smart contract audits involve reviewing contract’s code to identify security flaws and errors, ensuring the reliability and security of blockchain applications. This process is crucial because smart contracts function strictly as written, without room for post-deployment corrections, making early error detection vital.
Smart contract audit service offers several advantages:
Although blockchain technology itself is secure, blockchain applications may still contain security vulnerabilities.One of the biggest security incidents involving smart contract vulnerability was a theft worth $611m in 2021. The POLY NETWORK on BNB Chain was compromised. It was a Smart Contracts Vulnerability that led to a loss of $611.0M. To reduce these risks, a smart contract security audit team can be useful.
Code audits are crucial for all apps, but even more so for decentralized ones due to blockchain immutability. User funds cannot be recovered if they are lost due to a code vulnerability. Up to now, hackers have stolen over $5.79 billion from DeFi and a total of $7.65 billion from web3 DApps.
Smart contracts lacking audits risk legal issues like security flaws, regulatory breaches, and contract disputes. Unaudited contracts may contain exploitable flaws, risking financial loss and liability for developers. Ignoring regulations may lead to fines and legal trouble, while unclear contract code can spark enforcement issues. Unaudited contracts may violate consumer protection laws, inviting legal scrutiny. Parties must prioritize thorough auditing to minimize legal risks.
Name | Amount loss | Technique |
---|---|---|
Lendf.me (2020) | $25.0M | Incompatibility between ERC777 & DeFi smart contracts |
POLY NETWORK (2021) | $611M | Access Control Exploit |
BSC Token Hub Bridge (2022) | $570M | Proof Verifier Bug |
Euler Finance (2023) | $197M | Flashloan Donate Function |
Parity Multisig (2017) | $150M | Contract not initialized |
Mirror Protocol | $90M | Duplicate Call Exploit |
Ready to secure your smart contracts? Take the first step towards a safer blockchain journey. Request an Audit with QuillAudits today & ensure your contracts are robust and secure!
Discover and learn more about such attacks on smart contracts vulnerabilities with QuillMonitor.
Businesses worry about smart contract deployment's irreversibility and security flaws, prompting the need for auditing:
1. Avoid errors: Early code audits prevent costly mistakes post-launch.
2. Expert review: Experienced auditors manually double-check code for accuracy.
3. Prevent attacks: Continuous monitoring detects and prevents security breaches.
4. Enhanced security: Audits assure decentralized product owners of code security.
5. Continuous assessment: Ongoing audits improve the development environment.
6. Analytical reports: Vulnerability reports offer executive summaries, details, and mitigation advice
Here are some of the common vulnerabilities in smart contracts.
Reentrancy Issues:- A reentrancy attack may happen when a smart contract function interacts with an untrusted external contract, allowing it to exploit vulnerabilities and potentially drain user funds.
Rounding Off Issue:- The rounding off Issue in smart contracts refers to a vulnerability that arises from improperly handling non-whole numbers, leading to unexpected results due to rounding errors. A notable example is the Radiant Capital Hack on January 3, 2023, resulting in a $4.5 million loss.
Frontrunning Opportunities:- Inadequately structured code in dApps can accidentally disclose forthcoming transaction data. Users can exploit this to secure profits, a disadvantage to the protocol.
Function visibility:- These errors occur when functions meant to be private are mistakenly defined as public. This allows anyone to access the function.
External Calls to Arbitrary Addresses:- Fraudulent contracts could withdraw funds when prompted by external calls to random addresses, leading to fund loss. Attackers exploit this flaw to execute unauthorized actions, potentially disrupting the contract's functionality.
Inconsistent Data:- There can be several problems when smart contract functions use data without the necessary validation. Incorrect contract execution due to inaccurate data could have negative effects or financial losses.
Smart contract audits follow structured phases to identify and address vulnerabilities effectively. Here's an overview of each Phase and its significance:
1. Pre-audit Phase:- This Phase establishes the audit's foundation by grasping the project's objectives, structure, and smart contract functionalities. It ensures that auditors and developers understand the project's scope, goals, and potential areas of concern.
2. Manual Review:- In this Phase, manual Review ensures the contract aligns with specifications. It checks for common security vulnerabilities. The goal is to engage skilled reviewers for a thorough examination.
3. Manual Testing:- Smart contract will be manually deployed on any of the test networks (Ropsten / Rinkeby) using remix IDE. All the transaction hashes will be recorded. Gas consumption and the behavior of functions are also noted.
4. Functional Testing:- The smart contract is deployed in a sandbox environment like testnet / mainnet forks, hardhat, ganache, etc. Functions are tested thoroughly for intended functionality and performance. Verification ensures intended behavior and optimal gas consumption. Gas limits of functions are verified for efficiency.
5.Automated Review and Testing:- During this stage, auditors utilize advanced tools such as QuillShield and Slither, to scrutinize and analyze contract codes. The focus is on uncovering risks like security vulnerabilities, bugs, syntax errors, and weak code.
6. Initial audit report submission:- After thorough inspection, auditors submit an initial audit report detailing findings and recommendations for fixes.
7. Final Audit Report Submission: After the initial audit fixes, the process is repeated, and the final audit report is delivered.
Here's a comprehensive overview of tools used in smart contract audits:
1. QuillShield :- QuillShield is a comprehensive Web3 security platform designed to support enterprises, developers, and communities. It offers a range of security solutions from development to post-deployment.
2. Vulndetector :- Vulndetector, a top-notch tool, excels in detecting vulnerabilities, offering precision and gas optimizations for streamlined performance. Here are some vulnerabilities detected by this powerful tool, showcasing its innovative approach to smart contract security:
3. Mythril :- A framework for bug hunting that aids in finding potential vulnerabilities within Solidity smart contracts.
The Mythril tool can discover the following vulnerabilities:
4. SmartCheck :- This tool looks for vulnerabilities in the source code of smart contracts using static analysis. SmartCheck evaluates Solidity code against XPath patterns after converting it into an XML-based intermediate representation.
It checks for :-
5. ContractFuzzer :- ContractFuzzer utilizes this method to uncover vulnerabilities in Ethereum smart contracts, relying on their ABI specifications. It establishes test oracles, logs runtime behaviors, and analyzes logs for vulnerabilities in smart contracts.
The ContractFuzzer tool is capable of discovering the following vulnerabilities:
6. Slither :- This static analysis tool reviews Solidity source code for security flaws and ensures adherence to industry best practices. Slither is capable of discovering the following vulnerabilities:
Selecting a smart contract auditor requires considering factors to ensure contract security and reliability.
When choosing a smart contract auditor, focus on expertise, responsiveness, and audit techniques. Quill Audits delivers swift responses and thorough audits across diverse blockchain platforms.
We've audited top DApps and DeFi protocols, ensuring they remain secure and Free from Hacks. Check out their audit reports to see our impact.
Smart contract audits are crucial in blockchain, ensuring integrity, functionality, and durability. Irreversible transactions highlight a vital need for thorough audits, given the high stakes and losses from vulnerabilities.
Smart contract audits find and fix security issues, preventing errors and boosting blockchain app credibility with expert auditors and tools. Participants in the blockchain ecosystem must prioritize smart contract audits in project development. Using available resources, best practices, and professional auditing services reduces risk for successful blockchain solutions.
In the fast-evolving world of Web3 and DeFi, smart contract security is important. QuillAudits offers tailored auditing services for DeFi and Web3 ventures, securing over 850 projects and $30 billion in assets. Trusted globally, we safeguard blockchain assets effectively. Ensure your project's security with a free audit consultation from QuillAudits today.
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