How to Audit Smart Contracts: A Beginner's Guide to Smart Contract Auditing in 2023 (2024)

In the fast-paced world of blockchain technology, the security of smart contracts is of paramount importance especially when billion of dollars are in stake. That’s where smart contract auditors come into play. They are the heroes of the blockchain, working tirelessly to ensure that the code behind these contracts is free from vulnerabilities.

Smart contract auditing is a dynamic and high-demand field. As smart contracts continue to gain popularity, the need for auditors to ensure their security increases.

Armed with a strong methodology, essential tools, and a commitment to thinking like an attacker, you can join the ranks of the elite Smart Contract Auditors. Whether you audit for clients or participate in auditing contests, the principles remain the same. It’s time to master the art of smart contract auditing and secure the future of blockchain technology.

In this comprehensive guide, we’ll take you on a journey through the world of smart contract auditing in 2023, equipping you with the knowledge you need to become a Smart Contract Auditor, and helping you getting started with your first smart contract audit.

Oh, and if you prefer to watch the video tutorial, there you go 😉👇

Understanding Smart ContractAuditing

What Is a Smart ContractAudit?

Imagine building a new, groundbreaking smart contract or decentralized application (dApp). You’re excited to launch it into the world, but there’s a nagging concern: “Is it secure?”

This is where a Smart Contract Auditor steps in. A smart contract audit is a meticulous process in which an external blockchain security professional reviews the code, identifies potential vulnerabilities, and reports them to the development team. The goal is to ensure that the smart contract is safe and secure, and that no malicious actors can exploit it once it goes live on the blockchain.

The Uniqueness of Smart ContractAuditing

Smart contract auditing isn’t like any other cyber security job. It’s a niche field, and not many professionals possess the expertise required. This uniqueness translates into substantial monetary rewards. As the demand for security in the web3 space continues to surge, auditors are in high demand, and their pay reflects this scarcity.

Essential Tools forAuditors

Smart contract auditors have their trusty set of tools. I personally recommends tools like Solidity Visual Developer and Inline Bookmarks to make the auditing process smoother. These extensions allow auditors to add comments and track issues effectively, streamlining the review process, for more info checkout the video:

Smart Contract Auditing Methodology

Step 1: Project Documentation Review

Reviewing the project’s documentation is the foundation upon which you will build your understanding of the smart contract’s purpose, functionality, and intended user interactions. Without this knowledge, you’d be navigating a maze without a map. The documentation offers insights into the project’s goals and functionality, allowing you to grasp its intricacies.

The documentation will often includes diagrams that visualize the inner workings of the protocol and the relationships between its smart contracts. These visual aids can be invaluable in understanding how the protocol is supposed to operate, which is critical for the auditing process.

Step 2: Forming an AttackModel

With a comprehensive understanding of the project’s documentation, it’s time to form an attack model. This involves thinking through various scenarios:

• First, consider “Happy Scenarios” where everything goes as expected. These scenarios encompass user interactions that should result in successful outcomes.
• Then, contemplate “Dangerous Scenarios” where things could go wrong. What are the potential pitfalls and vulnerabilities in the smart contract’s logic that could lead to undesirable outcomes? Forming an attack model is a critical step in anticipating where vulnerabilities may lie.

Step 3: Line-by-Line CodeReview

It’s time to delve into the codebase. You’ll need to clone the code to your local machine and use your preferred integrated development environment (IDE) with specialized extensions for smart contract auditing.

Spotting Vulnerabilities While reviewing the code, your objective is to identify vulnerabilities that could potentially be exploited by malicious actors. This is where your keen eye and analytical skills come into play.

Step 4: Thinking Like anAttacker

One of the distinctive aspects of smart contract auditing is the need to think like an attacker. This mindset shift is crucial for understanding how vulnerabilities can be exploited.

Adopting the AttackerMindset

To become a smart contract auditor, you must adopt the mindset of an attacker. This involves thinking creatively and outside the box to identify potential vulnerabilities. It requires considering how to break the system and anticipating attack vectors.

For those seeking a structured and practical approach to learning smart contract hacking, comprehensive courses are available. This course offers a step-by-step curriculum, covering topics such as Reentrancy Attacks, DAO Attacks, Frontrunning Attacks, and more advanced smart contract security concepts. The Smart Contract Hacking course is an example of a practical course it includes:

Expert Instructions

The smart contract hacking course is led by some of the best professionals in the industry, renowned for their expertise in smart contract security:

Closed Discord Community

The Smart Contract Hacking Course offers access to a closed Discord community where students can connect and collaborate. This community-driven approach allows learners to share their experiences, ask questions, and receive support from peers and instructors.

Hands-on Exercises

The course emphasizes practical learning through hands-on exercises. For every chapter or concept taught, students are provided with exercises to reinforce their understanding and apply their knowledge. These exercises typically involve analyzing and exploiting vulnerable smart contracts in a controlled environment, allowing learners to gain valuable real-world experience.

Final Test and Certification

To evaluate the knowledge and skills acquired during the course, a final test is conducted. This test assesses the students’ ability to identify vulnerabilities, propose mitigation strategies, and apply best practices in smart contract hacking. Upon successful completion of the final test, students are awarded an official smart contract hacker certification. This certification serves as a valuable credential, demonstrating proficiency in smart contract security to potential employers or clients.

Step 4: Using AuditComments

Documentation on the Go As you navigate through the code, it’s essential to leave a trail of audit comments. These comments serve as your personal documentation of the auditing process. They help you track your observations and insights, ensuring that you don’t miss any potential vulnerabilities. Color-Coded comments and bookmarks will help you to enhance the clarity of your audit comments, these color-coded insights will provide a visual reference, making it easier to compile the audit report for the client.

Step 5: Compilation and Reporting

It’s time to compile your findings! Categorize the vulnerabilities based on their severity, classifying them as high, medium, or low risk. Additionally, include recommendations on how the development team can address these issues.

Creating a Detailed Report The final step in the auditing process is to assemble a comprehensive audit report. This report serves as the bridge between identifying vulnerabilities and ensuring they are resolved. Include details on each vulnerability, such as its location in the code, a description of the issue, its potential impact, and specific recommendations for mitigation.