Smart contracts are programs that execute the code within them without exception. There is no way that the agreement terms won't be met, which makes it easy to work with someone you don't trust.
Smart contracts are already being utilized to facilitate a variety of agreements, and with organizations like Ethereum allowing developers low-cost access to their services, anyone can now tap into the power of smart contracts these days.
This is exactly why smart contracts are often regarded as the most exciting area of blockchain technology implementation.
One thing to note, though, is that this new technology has its own set of challenges. One of the main challenges of a smart contract is the need to conduct an extensive audit before implementing it, as an improperly written and optimized contract can be detrimental to the project. Overlooking a single bug could cost companies $10s of millions on top of staining a company's reputation.
What Is a Smart Contract Audit?
A smart contract audit involves developers inspecting the code used to underwrite the terms of the smart contract. By auditing a contract, they have the chance to identify any potential bugs or vulnerabilities before the deployment of a smart contract.
Smart contract audits can be costly and are usually conducted by a third party to ensure that the code is examined as thoroughly as possible, as well as without any biases.
The importance of a properly written smart contract code is enormous, as once written in the blockchain, the code cannot be changed.
Do Smart Contracts Have to Be Audited?
Before launching on the blockchain, smart contracts require rigorous checks as they are immutable and any error or security flaw can result in irreversible damages, such as financial loss or privacy breach. This is where audits come into play, fortifying contract's security and strength. The process entails in-depth code examination, logic verification, and testing to detect weaknesses. Post-audit, developers rectify identified issues, bolstering the contract's reliability. Thus, audits minimize risks, rendering smart contracts safer and instilling trust among users and developers alike.
How Is a Smart Contract Audit Performed?
In order to properly audit a smart contract, developers have to check for common errors such as stack problems, compilation, and reentrance mistakes, host platform's known errors and security flaws, as well as to break test the smart contract. Smart contracts can be inspected manually or automatically.
Manual vs. Automatic Code Analysis
A manual code review involves developers thoroughly examining each line of code in order to find mistakes as well as security issues. On the other hand, an automatic code analysis works by creating a copy of a smart contract and then testing it with programs such as Populus or Truffle.
While automatic code analysis saves a lot of time, it has to be taken into account that this method has numerous drawbacks, including missed vulnerabilities or certain parts of code being falsely identified as a problem.
Most smart contract auditors use both methods in order to minimize the chance of a mistake.
The performance of a smart contract is directly linked to the quality of the code, and performance validation is a method used to focus on this particular problem and fix any performance issues.
While a code may not have any issues while performing certain actions, it may slow down or affect some aspect of the contract in a way.
Optimizing contract triggers and inspecting contract fulfillment is a key component of this part of the audit.
Gas Analysis and Optimization
Smart contract platforms cover the costs of executing smart contracts by imposing a small fee, which is called Gas in the case of Ethereum's blockchain.
Gas prices vary depending on the smart contract complexity, as well as network congestion. Good smart contract developers will have a good idea of the gas costs before even starting to code the contract.
Optimizing gas costs is a big part of the smart contract audit, as it directly affects the cost of implementing this technology.
It is a well-known fact that every single piece of code can contain vulnerabilities, and smart contracts are no different. There have been numerous cases of hackers exploiting smart contract vulnerabilities and stealing funds from the network.
Ethereum smart contracts are susceptible to various forms of attacks, most notably:
- Reentrancy attacks
- Reordering attacks
- Over and underflows
- Short address attacks
- Replay attacks
Developers use various software as well as check the code manually in order to find any possible vulnerable spots that could be exploited.
This step of the auditing process is crucial for both creating a cost-effective contract, as well as for creating a safe contract that will not be exploited and tarnish the reputation of your company.
If you're intrigued by the concept of smart contract audits, you'll definitely want to dive deeper into the world of blockchain technology. Don't miss out on our enlightening blog post, 'Smart Contracts vs. Traditional Contracts,' to uncover the unique differences and exciting advantages offered by smart contracts!
Smart Contract Audit Cost
One crucial aspect to consider while examining the audit price or the cost of any smart contract audit is that the specific expense is contingent on several decisive factors. The pivotal point here is the company's choice to carry out the audit internally or engage a third-party auditor.
Although outsourcing a smart contract audit may seem to require a larger initial investment, the odds of pinpointing security flaws tend to be higher. This is due to the higher expertise level of third-party auditors and the absence of potential biases that internal auditors might harbor. Thus, when we look at how much does a smart contract audit cost, these are significant factors to bear in mind.
Furthermore, other elements influencing the smart contract audit cost include the length of the smart contract, which is measured in lines of code, and the projected engineering hours needed to complete the audit.
An additional factor that profoundly affects the smart contract audit price is the reputation of the auditing entity. The audit's quality and price can greatly differ depending on who carries out the audit. For instance, a minor smart contract audit may cost from a few thousand dollars to as high as twenty thousand dollars, based on the auditing company. Meanwhile, a more complex and extensive smart contract might cost upwards of half a million dollars.
Looking for a cheap smart contract security audit might not always guarantee quality. Auditors such as CertiK, OpenZeppelin, and Consensys are known as the leading companies in smart contract auditing. Their certificates are highly valued in the industry.
Types of Audit Companies
The intricacies of the blockchain industry necessitate stringent security measures, and smart contract auditing stands at the forefront of these safeguards. Understanding the audit process and cost implications are paramount for businesses planning to integrate smart contracts into their systems. We'll explore high-end, mid-range, and low-end audit companies in this article to give you an insight into the smart contract audit cost at different service levels.
High-End Audit Companies
When it comes to smart contract security, there's no company more synonymous with excellence than CertiK. Their rigorous manual and automated testing procedures uncover even the most obscure security vulnerabilities, providing peace of mind for high-stakes blockchain projects. A CertiK audit dives deep into the smart contract code, ensuring every line is safe, secure, and performs as expected. Their detailed smart contract audit report empowers businesses with a comprehensive understanding of their contract's performance and potential weaknesses.
However, such an exhaustive process comes with a price tag to match. The CertiK audit price often ranges into several tens of thousands of dollars, which, while pricey, is a justifiable expense for large enterprises and high-profile projects. The CertiK audit cost is a reflection of their team's expertise, the thoroughness of their procedures, and the value of the security assurance they provide.
Mid-Tier Audit Companies
Mid-level projects requiring smart contract development often necessitate a fine-tuned harmony between cost-effectiveness and thorough security precautions. Quantstamp and Trail of Bits are examples of firms that deliver reliable Ethereum smart contract auditing services that are both high-quality and affordable.
These businesses employ a blended approach of manual evaluation and automated testing to spot potential irregularities within the smart contract code. Moreover, they provide an in-depth audit report that encapsulates their discoveries and suggestions. The cost for smart contract auditing at these mid-tier firms is typically in the several thousands of dollars, making them an appealing option for many enterprises.
Their teams are composed of blockchain security professionals who not only discover existing flaws but also guide developers on how to avoid potential security risks in the future. This comprehensive view of security positions mid-tier auditing firms as an optimal choice for projects that need to balance budget constraints with thorough security.
This comprehensive view of security positions mid-tier auditing firms as an optimal choice for projects that need a company smart contract audit that balances budget constraints with thorough security.
Entry-Level Audit Companies
For budding companies and small-scale initiatives, a budget-friendly smart contract audit can be sufficient. Companies, like Solidified, offer basic services that are both cost-effective and efficient. While they may not delve as deeply as CertiK in their audits, they still carry out crucial assessments for common security issues.
These entry-level audit firms usually concentrate on Ethereum smart contract audits and produce a rudimentary smart contract audit report that details your contract's security condition. Using blockchain security unit tests and a blend of manual and automated testing, they certify that your smart contract code is secure and ready to be implemented.
The price for these services can fluctuate greatly based on the complexity of the smart contract, but in most cases, a couple of thousand dollars should suffice. While this price range may not offer the level of in-depth analysis a premium firm could provide, it presents a feasible option for projects that need to operate within a limited budget.
Smart contract auditing is a crucial element of blockchain development, and there's an auditing firm to match every project size and budget. In this sector, the saying "you get what you pay for" often rings true, so it's essential to weigh the pros and cons when determining the cost of a smart contract audit.
What Smart Contract Auditing Boils Down To
New projects are usually very conservative with spending their funds as they haven’t had any success in the market yet. Therefore, they mostly use smart contract audits as a way to show investors that their code is safe. In their case, the auditor certificate may be more important than the audit itself.
On the other hand, large projects that already acquired the required financial backing opt for well-known auditors that have proven themselves in the space. For them, the certificate means far less than the additional safety that the audit provides.
However, whether you are working on a small or a large project, and whether you are doing the audit for the certificate or for the added safety of your contract, one fact remains - almost every single smart contract auditor is overbooked, and you will likely have to wait for your audit for up to six months.
Of course, any party interested in getting their smart contract audited is able to get quotes directly from auditors themselves.
While there are many ways to approach a smart contract audit, the main goal of this inspection should be to ensure that the code is properly optimized and without any bugs.
Many companies dedicated themselves to developing powerful tools to help automate the process of smart contract auditing smart contacts, which made the process a lot cheaper nowadays.
While being able to perform in-house audits became much easier, the majority of developers recognize the value of having a third-party auditor.
Check out our blog to learn more!