Securing the Blockchain: The Critical Role of Smart Contracts Audits
Smart contracts frequently dominate discussions in the world of blockchain, yet their security aspects are often overlooked. While they are praised for being self-executing agreements that eliminate the need for intermediaries, a cursory glance at the cryptocurrency market reveals the potential security vulnerabilities inherent in smart contracts. Recognizing this, Bidds prioritizes security above all. Our commitment is to provide end-users with a secure and reliable environment. This focus allows users to concentrate solely on the performance and trading of digital assets, such as their magical monkey NFTs, in a protected digital space.
Critical Yet Flawed
Smart contracts are often acclaimed as the foundational elements of blockchain technology, yet many issues within blockchain systems can be traced back to coding errors in these contracts. However, it’s important to approach this topic with nuance rather than hastily blaming developers. Consider the intricacies of a smart contract’s code: it dictates the sequence of actions in response to user or owner commands. Take Solidity for instance, it appears as a straightforward language that developers can quickly learn. Yet, mastering it doesn’t guarantee perfection. In coding, every character is critical; a single error can lead to anything from minor glitches to catastrophic financial losses.
Beyond coding mistakes, a more insidious threat looms over many blockchain projects: deliberate malicious acts. Often, shockingly, the perpetrator is the project owner themselves. The decentralized finance (DeFi) community has been particularly afflicted by such deceptive practices, known as ‘rug pulls’. This is not just a coding mishap but a deliberate scheme. Typically, a project owner might launch a decentralized app (dApp) with the ulterior motive of enticing users to invest. Meanwhile, they embed backdoors within the app, enabling them to drain all invested funds. This level of premeditation distinguishes a rug pull from ordinary coding errors, representing a significant ethical and security breach in the blockchain world.
At the bidds NFT Marketplace, we plac e a high emphasis on the security and integrity of our ecosystem. As such, we strongly advise all projects to conduct thorough audits of their smart contracts prior to deployment. To safeguard our community and maintain the integrity of the ecosystem, Bidds reserves the right to restrict visibility or entirely remove collections/unaudited smart contracts from the NFT marketplace.
What is a Smart Contract?
A smart contract is essentially a set of coded instructions embedded on a blockchain, designed to autonomously execute specific actions when predetermined conditions are fulfilled. Think of it as a program residing on a blockchain network, consistently delivering the expected outcome when certain predefined criteria are met. This automated execution ensures that the smart contract behaves predictably and reliably whenever these conditions are triggered. On the Coreum blockchain, smart contracts are executed using WebAssembly (WASM), which overcomes several limitations of other smart contract engines like the Ethereum Virtual Machine. This includes addressing security flaws, data oversizing issues, and dependency on specific programming languages like Solidity.
WASM allows smart contracts on Coreum to interact with contracts on other blockchains using the Inter-Blockchain Communication (IBC) protocol, enhancing the blockchain’s functionality and integration capabilities.
What is a Security Audit?
The primary objective of conducting security audits on smart contracts is to identify and rectify vulnerabilities and errors within decentralized applications (dApps), protocols, or blockchain systems that operate on these contracts. Since these technologies fundamentally rely on smart contracts, their thorough examination is a critical component of the development process. An audit is instrumental in uncovering any potential weaknesses that could be exploited for an attack, whether the threat originates from within the project team or from external actors. At Bidds, all existing and future smart contracts will be audited by reputable firms that specialize in blockchain and smart contract security. Currently, we are working with QuillAudits to audit the first smart contracts for Bidds. Other popular examples of auditors include CertiK, Consensys, SlowMist, and so on.
In general, an auditing process is comprised of several critical stages:
- Initially, an assessment of the project’s scope and objectives is conducted. This preliminary step provides the auditor with a clear understanding of the smart contract or decentralized applications (dApp) intended functionality.
- The next phase involves automated auditing to identify apparent issues. This step ensures that common, easily detectable problems are not overlooked. Additionally, thorough unit testing is implemented, scrutinizing each line of code to confirm its efficacy.
- The final stage is a manual review, where skilled professionals meticulously examine the code. Top-tier firms often employ multiple teams for this to mitigate human error. Here, the audit transcends technical inspection, as auditors must also ensure the contract adheres to the anticipated business logic. Given the potential for varied interpretations of the code, this step is crucial for verifying the contract’s alignment with its intended purpose.
While absolute perfection in auditing is unattainable, reputable audit companies strive to identify as many issues as possible, regardless of their severity. This meticulous approach is critical for ensuring the highest level of security and functionality in blockchain projects.