What are smart contracts?
Smart contracts are digital contracts that automatically execute financial transactions once specific terms and conditions are met. Smart contracts make up the foundation of decentralized finance. The significant benefits of smart contracts are speed, efficiency, accuracy, trust, transparency, security, and savings. Most transactions on the blockchain utilize smart contracts.
Smart contract security risks
A smart contract offers many benefits. They may seem like complicated systems, but all smart contracts are still computer programs or protocols. They have function statements and variables but they are vulnerable to hacks. Also, many smart contracts are fraudulent in nature: unethical actors insert malicious functionality to get unauthorized access and steal money. In our practice, we have seen dozens of unique and repeated loopholes inserted in the code. Besides, some parts of the protocol can be of low quality in terms of protection. Hackers carefully study all the errors and try to capitalize on them.
Smart contract hacks and exploits have been steadily increasing in past years. This is explained by the fact that more and more actors are using smart contracts for an increasing number and complexity of transactions. On top of that, unethical actors have been upgrading their hacks and scams.
Without adequate protection and security measures, smart contracts are subject to security loopholes, security vulnerabilities, security problems, and security threats. In addition to losing money, potential threats include a sensitive data breach or a private data breach.
Smart contract security audit
A smart contract security audit is integral to an organization’s security posture because it prevents hackers from stealing money. Projects that have successfully passed full audits can rightfully brag about their security. Customers will trust such projects and find them more convincing.
Audit Process
The audit process consists of vulnerability assessments of smart contracts as well as identification of security flaws and network vulnerabilities. The audit team will review existing security practices that the project uses in its smart contracts. The auditing firm will also provide recommendations to the project team on security policies and better security controls designed to protect the project from new vulnerabilities.
Internal audit vs. external audit
The project can, of course, use its internal resources to review smart contracts. Internal audits can also identify vulnerabilities, but a third-party auditing team offers an external call on the organization’s network and assess staff training. On top of that, the internal team may lack the necessary expertise to comprehensively review a smart contract. External audit firms have entire teams that specialize in security research and smart contract vulnerability assessment. Another benefit of using external teams for smart contract audits is to receive an authoritative opinion and informed recommendations from the outside.
Smart contract security audits by Hacken
Hacken utilizes industry standards to provide all types of security audits and accompanying smart contract audit services. Our company is also a proven leader in penetration services. Hacken conducts both routine audits and one time audits. We perform security audits of all major chains, including Ethereum smart contracts as well as Solana, Binance, Avalanche, and Polygon smart contracts.
There is a real risk of losing hundreds, thousands, or even millions of dollars due to exploits of smart contract vulnerabilities. A full audit by a team of professionals will help protect your financial interests by identifying and removing all vulnerabilities and exploits.
