Smart contract security problems pose a serious threat to token sale projects. Not auditing smart contracts for security flaws before deploying might come at a high cost to investors and the project team. Considering the amount of funds that can be lost if your code is hacked, the security audit should be taken not as expenditures but as an investment.
What is a Smart Contract Audit?
It’s a rigorous check-up of code concerning bugs, vulnerabilities and future risks before it is deployed onto the Ethereum’s network where it cannot be modified.
Keep in mind that the audit is not a 100 % guarantee of a smart contract’s security and protection from flaws. Even in the case of a thorough examination nobody can assure that the contract or the application will have no vulnerabilities in the future. The audit process is sophisticated and involves understanding the purpose of the code and its compliance with set inputs, test development, event and error testing, and smart contract’s state changes testing at the least.
Why is the Smart Contract Audit so Important?
Since smart contracts aim to store, move and distribute assets, one atomic error in its code may lead to thousands of your investors’ dollars going nowhere. Note that while managing smart contracts, you are dealing with a lot of money belonging to people who trust you.
Once the smart contract goes live, it cannot be modified due to its immutability. Regardless of the type of smart contract we are talking about – whether it is a contract with no Ether transfer (easiest to audit); one with Ether transfer (a bit harder to audit); or a contract with off chain interaction (the hardest one) – the audit needs to be performed meticulously. In case of any issues found after the smart contract is deployed, there is nothing one can do about it due to the irreversible nature of the entire setup.
The DAO (a decentralized autonomous organization) fiasco in May 2016, where over $50 million (over 3.5 million ETH) was stolen was due to a weakness in the smart contract. Subsequently, the Ethereum network had to implement a hard fork aiming to restore the lost investments, which fully illustrates the critical importance of performing independent smart contract examination.
With a fresh eye, external auditors carry out a thorough testing, in order to protect your investors before it’s too late to go back. The audit needs to be performed by experts who have experience both in smart contract development and security. COINAdmin’s comprehensive solutions feature smart contract development and auditing, which allows founders and CTOs to issue tokens without being a Solidity programmer.
Aside from developing customized smart contracts for crowdsale based on ERC-20 or ERC-223 standards, COINAdmin also conducts an audit of smart contracts developed by third parties to ensure their quality and reliability.
All smart contracts are developed by the dedicated team of professional blockchain developers who conduct extensive testing for quality assurance. An independent auditing of all custom-developed smart contracts is available upon request on the official website.
Can you think of an instance where failure to audit a project’s smart contract led to major losses? Tell us about it in the comments below.
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The post A Small Bug Costs Millions! Why Smart Contract Auditing Is so Important appeared first on Live Bitcoin News.