Nowadays, smart contracts fit perfectly into blockchain technology. They cater to almost all industry segments with various applications and internal transaction options. On the other hand, traditional legal contracts are used almost everywhere – from finance, advertising projects, game contract, etc. However, these potential security holes can be exploited by hackers to compromise the whole creating process of smart contracts, ultimately resulting in lost revenue and other contract data.
Therefore, it is important to understand the security external and internal functions of smart contracts to prevent this from happening. In addition, conduct a blockchain audit and verify the proper implementation and other aspects of protecting smart contract platforms against possible cyber attacks and hacking.
Main Factor that Reduces Smart Contract Security
Lots of factors may have an influence even to secure smart contracts. And due to these reducing factors, they become untrusted contracts with dangerous bugs and errors. Blockchain industry is supposed to use different programming languages and consensus algorithms in Stellar, Tezos, EOS, and Ethereum smart contracts.
Despite the use of various security tools in secure smart contracts, errors and bugs in the codes are the main cause of smart contract security problems. It all leads to different types of damages for parties involved, including financial.
In 2016, the DAO hack caused serious damage to the blockchain network. The hackers exploited the reentry vulnerability, and it resulted in huge errors in multiple functions in approximately $50 million in financial damage.
List of Hidden Smart Contract Vulnerabilities
Once the smart contract is uploaded to the network, no changes can be made. It means that it cannot be restored if a smart contract fails. Dangerous risks:
- Operating of any fallback function through a contract;
- Indirect execution of unknown code
- The number of withdrawn tokens is calculated incorrectly
- A record of redundant transactions, including the order in which they were executed.
Almost all errors can be detected or prevented in the future proof by checking the function body before the official launch.
Top-6 Tips on Secure Smart Contracts: Creating and Function Stages
It is important to test smart contracts. It includes checking the security patterns and working process of external functions. So take the following tips and best practices:
- Smart contracts should always be deployed on the testnet before being uploaded to the mainnet.
- Use the assert function to check any internal errors.
- When writing smart contracts, it is important to use a good compiler. A high-quality compiler will help you detect any bugs in the secure smart contract code, protect your contracts, and help you see errors in your code.
- The smart contracts follow all functions that have exception handling. It will help prevent unexpected errors that could damage external contracts.
- When using a library, it is important to ensure that it comes from a trusted source. You should also check the library code to make sure it’s safe.
- Use testing smart contracts security tools. For example, a static analysis tool spots errors and plays a role in the bug bounty program. And symbolic execution tool checks the framework of developing smart contracts.
Don’t forget to perform a penetration test. It can help you catch incorrect assumptions, monitor contract activity, access storage, and contract address correctness.
Smart contracts are a popular and, in most cases, secure solution with numerous advantages in terms of trust, accuracy, and cost-effectiveness. Unfortunately, they are prone to various hidden bugs and errors in the code that eventually compromise their security. When it comes to smart contract security, there are many factors, such as the type of blockchain network used, the platform’s programming language, and the type of testing you do before releasing the final version. At these stages, it is recommended to adopt and implement all best practices to improve their security.
Secure smart contract development provides a significant advantage, but it does not mean that there is no need for regular checks, the use of special tools, and best practices for protection. So check out the questions and answers that often appear in Google queries.
The frequency of verification largely depends on the features of the smart contract agreement. Do a test before launching and adding a smart contract to the system, and consult with the review team on how often your contract should be reviewed. The security audit time also depends on the range of tests ordered, but on average, it lasts about 7-10 days.
Many security tools can fix and mitigate internal and external errors in smart contracts. Among the most commonly used:
– Oyente for analysis of secure code;
– SmartInspect for analysis of deployed smart contract;
– Securify for analysis of security vulnerabilities;
– SmartCheck for translating solidity code to XML format;
– Vandal for solving sample code to logic relations.
They all serve to ensure smart contract safety.
Before the launch of smart contracts on the main network, it is tested. It will help detect any existing flaws and malfunctions and prevent them. Once again, ensuring you are safe will save money and time in the future.