For over a decade now, we have been experiencing the most revolutionizing spring in the world of digitalization. The intrusion of bitcoin has now laid hands on the progress of the metaverse, digital collectibles, and multiplied revenue streaming spaces. While smart contracts are startled as a fine warmth supporting the season’s dews. Over 24.2% of CAGR, the global smart contract market will overeat almost 1460.3 Mn USD. Expressing its demanding needs in marketing, to be sturdy and perfect matters. Smart contract auditing is one key factor validating its codes and there are pretty much applicable tools and auditing standards to get things right. But is that all of that how it’s going to work?
Let us here put things together to analyze if the current smart contract auditing standards are progressive in the days of growing use cases.
Smart Contract Auditing – Basic to brush up
Understanding the nature of criticality and its possible contract flaws are important. By discovering errors, smart contract security breaches are identified in the process. By going in and out of the project, its depths and vulnerabilities are identified to protect from them.
The underpin codes are all examined keenly in the process of Smart contract auditing to ensure the transactions are carried out by the norms and do not malfunction.
Auditing For Cyberattacks And Security Breaches
All the pressure is pressed into the hands of Blockchain developers and they break their knuckles to get rid of the bugs and their bites to render a non-vulnerable suit for the real world. The Baiting and Reentrancy attacks are the two main malicious entities that successfully attack the ecosystem. The baiting attack mostly relies on the social engineering tricks such as heaping through victims to send cryptocurrency to attack the wallets. The other trickier method can understand blockchain smart contracts comprehensively, through side chains and cross-chain wallets. Here these attacks are entangled by professionals who do smart contract auditing.
Challenges Included In Smart Contract Auditing
- Most ideal projects come up with an idea that security audits are something to think about while it’s not a part of the development process.
- The technical side expects the auditors to know the in and out of the specific blockchain and its technologies to point out better assumptions.
- The auditor would be in need to access the code functionalities to match the expectations of the code developer.
- Missing and incomplete documentation can also not give better details.
- Auditors’ reports are satisfying the authors.
Regulation Present In Current Auditing Standards
Blockchain-based auditing, stick to strict regulations and standards that follow up.
- California Consumer Privacy Act (CCPA) insists projects undergo an auditing process once in 12years.
- The American Institute of CPA’s SOC 2 expects every firm to audit once in six months.
- European Union’s General Data Protection Regulation (GDPR) calls to test, assess, and evaluate the effectiveness of the organization’s technical measures. It applies to handling personally identifiable information.
Most of the auditors in the blockchain business, entrust different standards and tools based on requirements and understanding to cull out errors and rectify them. Smart contract auditing is much simpler than the traditional method of auditing. The transparency in the technology is not corrupted. And this eases data access and contributes to time-saving audits and costs. And the use of the automated business process in Defi platforms makes the process easy and comfortable to verify transactions at ease.
Results Of Inappropriate Blockchain Smart Contract Auditing
Have we ever wondered what has happened in the industry? Either we are noticed with something hyping both positive and negative notions. But not the results as such and as precise. Here are a set of events, mostly cyberattacks that have so far transpired due to the negligence of the technical vulnerabilities of the Blockchain network along with the absence of strict and sturdy inspection standards.
- Genesis DAO was attacked back in 2016 by hackers who exploited its security loopholes and stole $50 million ETH that came in through crowdfunding.
- Around $150 million worth of ETH was stolen from Parity technologies in 2017. Its critical vulnerabilities gave smart luck to the mongers who were behind that.
- Back in august 2021 is marked as the biggest crypto heist. Mainstream hackers steal digital currency worth $613 million from Poly Networks.
- 2nd February 2022 was a day that gulped nearly $320 million from Solana and Ethereum by the wormhole cross-chain bridge attack.
- 3rd August 2022 many thousand Solana wallets drained a sum of $8 million which anticipates the reason is the complications in importing accounts.
Some Measures That could Lighten The Vulnerabilities
- Unencrypted files on the blockchain can be held a step back. And before adding confidential information to them, encrypting makes more sense.
- Denying authentication or overloading port attacks severely, so it’s better to check for sufficient space and processing power in the nodes.
- Smart contracts are unmodifiable and self-destructive at the same time. To be bug-free is to be safe and proxies functions allowing upgrades is an add-on.
- Functions are by default available for all, so defining a function’s ability can be a precaution to avoid trouble.
Increasing Use Cases In Smart Contract
With the expansion in the industry, we witness the growth nakedly and realize it. Moreover, digital payment methods now include crypto payments, which also brought in asset purchases in the digitized spaces including meta verse-based investments. And businesses eventually do find their season to explore the web3 market that has the freedom to breathe and act like they wish to eliminate centralized control.
Just this briefing gives us an overview of the expansion in the market in both sectors. Private and Public sectors find their roots to grow strong in the market taking every business nominally to global endeavors with a target to expand beyond boundaries. With the growing demand in the market, in-return demands smart contracts to validate and own their space in the blocks.
Reasons To Enforce Guidelines Over Current Auditing Standards
We have understood the need for smart contracts, and their importance in real-world attribution. With growing demand and upgradation, crucial updates in blockchain Auditing guidelines will make a bigger and better impact. Like any other field of choice, sticking to traditional algorithms makes it more comfortably outdated for the current establishments. This can be adjusted by estimating based on the industry requirements, needs, and requirements. For every sector, the rules of auditing can be defined precisely and uniquely. And to do so, the right questions along with extreme and minutely silly challenges can be put forth, a trail for the main picture.
To start with, Figure out the right process to conduct the blockchain auditing effectively and at the same, to be flexible and meet all the requirements. To identify the right data analytics tool to support the process. And following up, bringing in a standardized auditing methodology is a must. So far there is no defined diagnosing process carried out. It’s important to bring one for the same, giving the creators a clear picture of the does and don’ts, guidelines, formats, structure, checklist, and every other idea on the procedure for validation to scale up their creatives in the blockchain networks.
Keeping all this aside, the practical difficulty lies in understanding the precise note of blockchain law and its interoperability. Also, there is this waiting period which is obvious when expecting the issue of standardized guidelines. The formulations that were set forth earlier never mentioned or acted on particular needs instead they anticipated, that was a contagious lag in the system to head forward.
Moreover, the standards that are existing in the auditing agenda of the jurisdiction are also way different from one other. That also made things harder to render efficient auditing. Adding to this, the lack of skill sets in auditing companies and organizations makes it a tiring and ineffective attribute to evaluate blockchain.
How To Improve Smart Contract Auditing?
To improve the standards and Procedure, defining its purpose precisely can help in better functions. And to train professionals to act professionally and effectively is important. Many smart contract auditing firms are blooming in every shape and corner. Choosing the best is about being wise. And to fix your parameters in the process of hiring a smart contract auditing service provider, can also be a suggestion to set standards and build the process with high standards.