Smart Contract Audits Are Your First Line of Defense Against DeFi Exploits: Here's Why

Considering that the DeFi market lost even more money to hackers than scammers, one cannot overstate the importance of a secure smart contract. 

What is a Smart Contract Audit?

In its simplest form, a smart contract audit the smart contract's accuracy and security. It requires a thorough code review to verify it works as expected and has no flaws or vulnerabilities. 

A smart contract audit should include manual inspection by experienced developers and automated testing using specialized tools. This ensures that potential issues are identified and addressed before the contract is implemented.

Due to the past scams in the crypto market, the need for smart contract audits is greater than ever.

Moreover, considering that the DeFi market lost even more money to hackers than scammers, one cannot overstate the importance of a secure smart contract. 

Why Do Blockchain Applications Need Smart Contract Audits? 

Smart contracts are the backbone of blockchain applications, so it's essential to ensure that they're accurate and secure before implementation. A smart contract audit is one of the best ways to do this. 

An audit should identify any issues with the code, such as vulnerabilities or errors, which can be corrected before deployment. This helps reduce the risk of any security breaches or financial losses, which could have a devastating effect on businesses. 

In addition, smart contract audits are often required to meet . By auditing your contracts, you can ensure they comply with all relevant laws and regulations. 

Another important reason to have your smart contracts audited is to build customer trust. Having your contracts verified by an experienced team shows you take security seriously and helps instill confidence in your business.

Benefits of Smart Contract Audit for Decentralized Apps

When you get a smart contract audit, you ensure that your script is updated with current technologies and industry standards. 

You'll be able to ensure that the code is secure and performing as expected. This operation aims to give you peace of mind knowing that your contracts are reliable. 

Additionally, an audit can help minimize your contracts' potential legal or financial issues. It can provide a comprehensive review of technical vulnerabilities, coding errors, and other deficiencies that could put you at risk. 

Plus, it's an opportunity to catch mistakes before they become costly problems down the road. A smart contract audit is like a health check for your code, and it's well worth the effort. 

Risks Associated with Not Getting a Smart Contract Audit 

It’s essential to take a moment and consider the risks associated with not getting a smart contract audit. Not properly vetting your smart contracts can lead to disastrous consequences that can affect you, your project, and those involved. 

Unaudited code may contain vulnerabilities or loopholes that malicious actors may exploit. In the worst-case scenario, you may have a financial loss and damage to your project's reputation. 

Additionally, it can leave you open to litigation from users or other parties adversely affected by a code bug. 

Finally, a lack of proper testing could result in unforeseen issues that arise over time. This fact generally appears with changes in the underlying technologies used by the smart contract. 

Steps In a Smart Contract Audit 

Smart contract audit companies follow a thorough procedure when reviewing your code. While each company has its recipe, we can list the following common steps:

Understand the project and its needs: This is the first step of any smart contract audit. The auditor will investigate what your project needs to do, its functionalities, and how it fits into the blockchain ecosystem. 

Evaluate code quality: Auditors assess the source code and all associated documents related to your project. They look for issues ranging from logical and technical flaws to security vulnerabilities.

Identify risks: After the initial evaluation, auditors will identify potential risk areas related to your project. This is done through a combination of manual analysis and automated tools designed to detect issues in your codebase.

Suggest corrective action: Once the risks have been identified, it's time to take corrective action. Depending on the risk level, auditors suggest changes to your project or provide tutorials demonstrating best smart contract practices.

Test the code: Testing is vital to any smart contract audit. Auditors run simulations and tests to ensure the code behaves as expected when deployed onto a blockchain. 

Finalize audit: After addressing all risks, the auditor will issue a full report outlining any remaining issues and provide recommendations for improvement. You're ready to deploy your smart contract safely and securely at this stage. 

By following these steps, you can be sure that your project meets all necessary standards before deployment. 

How To Find A Smart Contract Audit Company in 2023

When it comes to smart contract audits, experience is critical. As such, it's essential to find a company with extensive technical knowledge that can provide accurate results.

You might want to look for:

1. Past Clients of the smart contract auditing company

2. Total TVL (Total Value Locked) secured by the clients of the smart contract auditing company

3. 'On-Chain' experience of the developers at the smart contract auditing company

4. Pricing and Timeliness of code review

Based on the above criteria, some of our recommendations are:

Disclaimer: These recommendations are the opinions of the author and not that of HackerNoon

Solidity Finance

is a big name in the DeFi space when it comes to providing smart contract audits. The company offers static analysis, automated tools, and manual review processes to ensure your project remains as secure as possible. 

Solidity Finance is dedicated to providing the highest level of security and safety in the space, with a claim of over 1500 audits completed successfully.

The company offers a turnaround as quick as 24 hours, line-by-line manual review, and a long experience with the Solidity code. If we add their automated penetration testing mechanism and clear+concise reports, we feel we have a recommendation!

In addition, the group has recently acquired "KYC Capital," which provides high-quality KYC Verification services. This move combines the audit process with a strong security layer when performing KYC checks.

SolidProof

Another popular choice in the sector is the German company . SolidProof provides many services to businesses in the crypto industry, such as KYC certification and auditing. The team also offers crypto marketing services, including influencer marketing and viral/shilling services.

With its smart contract audit service, businesses can save on costs while ensuring the security of their projects. By leveraging SolidProof's wide range of services, businesses in the crypto market have a greater chance of success. 

The team's process begins with a quote to assess the project and determine the cost. After this phase, the code audit will begin to ensure the identification of all potential vulnerabilities. 

Following this, SolidProof provides suggestions for remediation and delivers a detailed audit report with its findings. The result is an audit that gives businesses complete confidence in the security of their project.

The company's outlook looks bright in 2023, thanks to its upcoming SolidProof Automated Audit Tool (SAAT). SolidProof has already audited hundreds of projects in the past, as evident by its website, and it is enlarging its partnership network to increase its reach in the crypto market.

OpenZeppelin

has become a major player in the blockchain security space. The company offers various services and products, from automated scripts to its flagship product.

The team has developed a gamified vulnerability-finding tool and support for enterprise clients, showing its commitment and dedication toward cybersecurity. 

OpenZeppelin is working on blockchain governance systems to enable developers to quickly set up parameters and rules for their dApps.

An interesting feature of the platform is its "Defender" system. This tool brings automation to finding and fixing any potential security flaws in your code. With more and more projects looking for smart contract audits, the automation trend is becoming increasingly relevant in this space.

Coinbase, the Ethereum Foundation, 1inch, and others have trusted OpenZeppelin with their projects' audits. This speaks highly of the confidence people have in the company's services. 

The company frequently posts news about its growing team, which is often a sign of a growing business. OpenZeppelin plans to have a great year in 2023, as it has already established itself as one of the most reliable security providers for the blockchain and crypto space.

A Smart Contract Audit Does Not Eliminate Your Risk 100%

While smart contract audits are an important part of the development process, they do not guarantee that your project is 100% secure or bug-free. Auditors can only identify existing issues and flaws in the codebase and provide recommendations for improvement.

You and your team must execute those changes and deploy a sound product into production.  Audits are a necessary part of the smart contract development process. By conducting periodic audits and taking proactive measures, you can help ensure that your code is secure and reliable for years to come. 

Therefore, conducting a smart contract audit is necessary, but it is not the only step you should take to keep your code safe. Make sure you are employing multiple security measures, such as a secure development lifecycle and bug bounty program, to ensure that your project remains secure over time.

Furthermore, there exist insurances that you might want to consider to guarantee the longevity of your smart contracts. These DeFi insurance products will help provide some financial protection in case of losses due to code bugs or hacks. 

DeFi insurance can cover any potential losses due to a bug in your smart contract code that you failed to detect. That way, you can rest assured that any losses will be covered and that your project can move forward without interruption.

With the right steps and precautions, a smart contract audit can help to ensure that your project is ready for deployment and remains safe. If you combine regular audits with other security measures, the likelihood of potential issues is significantly reduced.

Wrapping up

When it comes to smart contracts, thorough auditing is essential. It helps ensure the security and reliability of your code, identify areas of improvement, and minimize potential financial losses. 

The companies above are just a few of the many that provide services to help you get your project up and running safely. Other popular names are and , which both offer comprehensive audits and additional services.

Ensure an experienced auditor reviews your project before deployment – it's the key to a successful launch.

Investing in a smart contract audit means taking control of your project's success by ensuring your code's security and reliability. 

It gives you peace of mind knowing that you have addressed any potential problems before they become major issues. Plus, it can help save you time and resources in the long run by avoiding costly mishaps. 

Ultimately, an audit is your best bet when it comes to launching a successful project on the blockchain.