Smart contracts are codes that hold together two or more parties. When certain predefined conditions are met, they execute automatically. They play a significant role within the Decentralized Finance (DeFi) ecosystem. Nevertheless, they are considered one of the most vulnerable parts of the ecosystem.
Fund loss isn’t something new—in today’s world, waking up with the morning headlines on hacks is unprecedented. The biggest cause of this is when smart contracts remain unaudited with numerous vulnerabilities that hackers turn into expensive exploits.
So, the simplest answer to avoid these malicious attacks is to get your contracts audited by the top smart contract auditing company. Here, we will understand the DeFi audit process, how it works, its challenges, and why it’s important.
What Is A Defi Smart Contract Audit?
It is no secret that the foundation of DeFi is automated smart contracts. Naturally, if there is any vulnerability present in them, it will straightaway hamper the smooth working of the system.
Simply put, a DeFi security audit is a comprehensive check and analysis of the code that auditors perform to prevent hacks. The process improves if a DeFi auditor carries it out as they provide an unbiased overview of the code.
How Does Defi Audit Work?
The auditors who perform the auditing process review the documentation, website, and software repository to find the security breaches in the code and all the other problems in the deployed contracts. After this, the auditors come up with a summary and report containing an exhaustive analysis of the project’s security and consistency with the whitepaper.
Three main stages of the DeFi audit involve:
Assessing the project:
First, the auditors study the whitepaper/ yellow paper of the DeFi software to know the business logic and predict the security properties and risk coverage.
Code review and verification:
Then, the auditors run the code with tools that automatically find the vulnerabilities (fuzzers, static analysis, symbolic execution).
Final audit report:
After the first draft of the report is generated and shared with the client, their
The coding team fixed the bugs and found vulnerabilities. Then, they send it back for verification. Finally, the smart contract auditing team performs the audit and creates a final report with the previous vulnerabilities and fixes.
Why Is Getting DeFi Audit Necessary?
It is said that the Blockchain technology of a smart contract is quite safe from the hacking exploits of malicious actors. However, this holds only if we can establish and maintain robust security and code quality. Otherwise, investors can lose millions of funds to hackers, which we have witnessed throughout the previous year. Thus, getting DeFi smart contract audit is highly recommended to keep decentralized finances safe.
When the auditors conduct this process, it becomes easier to eliminate the existing vulnerabilities in your smart contracts. In addition to this, you can even get sure of how reliable interaction your contract is performing.
These are some of the stats that point towards the severity of DeFi hacks. Thus, it is high time you get experienced auditors to audit your smart contracts if you don’t want to be a victim of such hacks!
Challenges That You Might Face During Defi Smart Contract Auditing Process
You need to give your undivided attention to this process. Even if you’re hiring an experienced blockchain cybersecurity expert for this work, you cannot turn a blind eye to the entire chain of activities.
These are some major challenges people face when they go for a DeFi audit.
- Some of the most common vulnerabilities in a smart contract include reordering attacks, reentrancy attacks, short address attacks, and more. So, ensure the auditor performs a thorough auditing process to address all the possible attacks.
- To get an accurate DeFi security audit, you must choose the experts for this work carefully. There are hundreds and thousands of such companies in the world today. Please review the portfolio and client testimonials before rolling out your work to them.
- A few days or months may pass before a smart contract audit is finished. It’s important to remember that the sort of smart contract audit being conducted and the size of the contract will determine how long the audit will last. Even if you want to launch the market as soon as possible, you must ensure it has been thoroughly examined.
Apart from the challenges mentioned above, ample technical challenges can also trouble you if you’re a newbie in this field. So, leaving it to an experienced professional is the best way to eliminate future hacks.
Decentralized finance platforms have been one of the top areas on the hitlist of hackers. High-profile projects have lost a huge amount of funds in the past and continuing. This leaves us with a dire need for a reliable DeFi smart contract audit to stay safe from hackers.
As DeFi continues to evolve, the audit rules also keep on changing. Therefore, it requires a big industry player with relevant experience in handling different types of audits. Remember, the aim is to keep your funds safe in a world that has a large number of prying eyes of hackers! You can go ahead with your search based on the list of things to look for in a good smart contract auditor.