Secure Your Smart Contracts: A Guide to Audits, Best Practices and Ongoing Vigilance

Recent events paint a worrying picture, suggesting that smart contracts, as a facet of blockchain technology, may not be entirely watertight.

  • On August 3rd, 2022, hundreds of Solana (popular blockchain for fast transactions) wallets were emptied, totaling roughly $ 8 million. The exploits were considered to have occurred due to difficulties in importing accounts.
  • On February 2, 2022, the Wormhole Cross Chain Bridge Attack cost Solana and Ethereum, two major blockchains, more than $320 million.
  • One of the largest cryptocurrency heists occurred in August 2021. Hackers seized $613 million in digital money from the Poly Network corporation. They took advantage of a flaw in the digital contracts used by Poly Network.
  • Due to a critical vulnerability in their Ethereum smart contract, $150 million in ETH was stolen from a business called Parity Technologies in 2017.
  • In 2016, a DAO dubbed Genesis DAO was compromised by a hacker(s) who took advantage of a security flaw in the system. In this case, hackers stole $50 million in ETH from Genesis DAO’s crowdfunding investors.

As blockchain technology and smart contracts continue to revolutionize the way we conduct business and interact online, it’s crucial to ensure the safety and reliability of these contracts. And, the best way to do that is by implementing regular audits, following best practices, and ongoing monitoring.

In this post, we will take you through five essential steps to secure your smart contracts, shielding you and your users from potential vulnerabilities.


Step 1: Audit, Audit, Audit

The first line of defense for your smart contracts is regular, thorough audits. This means reviewing your contract’s code to spot and address any potential security vulnerabilities. Having an experienced auditor review your code is crucial, as they bring the knowledge and expertise to identify weaknesses that might escape your attention. During the audit, the auditor will be looking for issues such as:

  • Unchecked user input: Smart contracts commonly accept input from users, such as when interacting with a decentralized application (DApp). It’s crucial to ensure this input is properly checked to prevent malicious actors from injecting harmful code into your contracts.
  • Reentrancy attacks: These are attacks in which a malicious actor repeatedly calls a function in a smart contract to exploit its vulnerabilities. The auditor will search for potential reentrancy attacks in your contracts.
  • Unchecked math operations: Math operations in contracts must be thoroughly checked to avoid overflow or underflow errors that can lead to unexpected behavior.


Step 2: Formal Verification – The Mathematical Proving Ground

Formal verification is an advanced technique that employs mathematical methods to prove the correctness of a smart contract’s code. This approach offers a higher level of confidence in the security of your contracts, by proving certain properties of the contract are true, such as that it will always terminate, and certain conditions will never be met.


Step 3: Best Practices – The Key to Staying Ahead

In addition to audits and formal verification, implementing best practices when developing your smart contracts is essential. Best practices include:

  • Staying up-to-date: Always use the most recent version of any libraries or frameworks that you are using.
  • Choosing audited libraries: Go for libraries and frameworks that have been audited by experienced security professionals.
  • Keeping it simple: The more complex a contract is, the more potential vulnerabilities it may have. Try to keep your contracts as simple as possible.


Step 4: Test, Test, Test

Before deploying your smart contracts to a blockchain network, it’s crucial to test them thoroughly. This includes testing the contracts in various scenarios, including normal and abnormal conditions. Additionally, test your contracts with different inputs, including unexpected inputs, to ensure they can handle them properly. You can utilize testing frameworks like Mythril and Solidity-coverage to assert the security and robustness of your contract.


Step 5: Monitoring – The Never-ending Story

Finally, ongoing monitoring of your smart contracts after deployment is essential. Monitor the contracts for unusual or unexpected behavior, as well as the blockchain network for potential vulnerabilities. By monitoring your contracts, you can quickly identify and address any issues that may arise.

In conclusion, securing your smart contracts is vital for the safety and reliability of your blockchain-based applications. By regularly conducting audits, utilizing formal verification, following best practices, testing, and monitoring your contracts, you can ensure they are as secure as possible.


Bonus Step: Hire a Professional!

The complexity of blockchains and smart contracts can make them challenging for IT teams to fully assess during a security audit or penetration testing. As a result, it’s often wise to seek the assistance of certified security auditors who specialize in smart contract review.

One option for getting a professional smart contract audit is to use EpicJam. We can handle the process for you, allowing you to focus on the business side of things. Our solutions and services can help you achieve all the security goals for your blockchain platform, such as implementing best practices to decrease the risk of cyberattacks and creating a robust application for your customers.

If you’re interested in learning more about EpicJam’s smart contract security audit solution and services, schedule a call with our expert team to discuss further.