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A smart contract security audit is an essential examination of a project's smart contracts to ensure the protection of invested funds. Given the irreversible nature of blockchain transactions, prevention is crucial as stolen funds cannot be recovered. The audit involves a comprehensive code review, resulting in a report for the project team to address any identified issues.

Let’s deep dive

A smart contract security audit scrutinizes and reviews the code of a project's smart contract.

Typically, the process is divided into three phases:

1. The audit team presents the results to the project stakeholders, highlighting the issues that need attention.

2. The team makes changes based on the identified problems.

3. The audit team releases the final report, considering any modifications or outstanding errors.

Why it's important?

Given the substantial value involved in smart contracts, they become prime targets for hacker attacks. Errors in the code can result in the theft of significant sums of money.

Therefore, it is imperative to prioritize code security in projects to mitigate potential vulnerabilities.

Audit Methods

While many audits primarily address security vulnerabilities, others assess efficiency and optimization, crucial for cost savings in networks with high gas fees like Ethereum.

Audits may also extend to analyzing the hosting network and the API utilized for DApp interaction.

Together, let's examine prevalent vulnerabilities that can jeopardize the security of smart contracts.

Front running

Poorly structured code can provide the opportunity to front-run market purchases or sales. This, in turn, can allow others to use the information and trade to their advantage.

Integer overflows and underflows

Integer overflow arises when a number surpasses the maximum capacity of its data type, while integer underflow occurs when a number falls below the minimum capacity.

In our scenario, this occurs during smart contract arithmetic operations, leading to incorrect calculations when the output exceeds the storage capacity (typically 18 decimal places).

Following the audit, a detailed report is furnished to the project team, outlining issue status and severity.

After the team addresses and resolves these issues, the auditors release the final report, affording the project an opportunity for last-minute improvements before the official release.


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