The world is moving towards digitalization. As a result, blockchain and cryptocurrency have taken over every industry, especially finance and investment. Smart contract security plays a significant role when choosing a legit project in the blockchain space. Smart contract security audits have become very common, and the projects started doing it without any public or investor demands. Blockchain projects started reviewing their smart contract codes with leading audit firms to win the trust of investors and community members. Regarding web 3.0, the audit for smart contracts is as important as the audit for cybersecurity.

Why Do Projects Audit Smart Contracts?

Projects undergo smart contract audit not only to establish trust but also to eliminate costly errors that cannot be fixed once the smart contract is deployed. In addition, when a project audits its smart contract, the in-house developers can get to know the vulnerabilities before the contract is up and running, saving a lot of time. The reason why smart contract audit has become mandatory for any good project is that smart contracts cannot be altered once they are deployed on-chain. Therefore, when the smart contracts are deployed without proper security audit, it might result in untoward discrepancies in the desired performance of the decentralized applications (DApps). Furthermore, a lack of a proper audit process might breach personal data.

The Need for Smart Contract Audits

The hackers usually target the hotspot areas, be it a centralized server where all the data is accumulated or smart contracts that hold vast funds. Minor faults in smart contracts may lead to huge sums of money being stolen through malicious attacks. This might sound awful. Theft of value locked in smart contracts isn't something new to the space. For instance, a DAO hack on Ethereum was performed. It roughly costs $60 million worth of ETH and led to the hard fork of the Ethereum blockchain. There are a lot of cases that have struck the smart contract landscape in the blockchain. In 2018, 1 million USD worth of assets had been stolen. The security of smart contracts is at stake when a minor loophole in the code paves the way for attacks. Since transactions on the blockchain are immutable and irreversible, making sure that smart contracts work fine is crucial. Blockchains are highly secure, and they never let anyone retrieve funds. A smart contract audit is the only process aiming to prevent vulnerabilities at all costs. A smart contract audit can prove helpful by optimizing the code and improving the efficiency and performance of smart contracts. Also, audit provides security against common hacking attacks like Reentrancy attacks, Short address attacks, and Reordering attacks.

Audit Reports

You can find the audit reports of crypto projects on their websites, as projects see it as a way of sharing their findings with their community members. These are just the final versions of the audits. Initial versions might have recommendations, a full breakdown of code errors, and examples of redundant codes. The projects are expected to be fixed before they are on the market.