The scope and capabilities of smart contracts have been extended with the adaptation to decentralization. With more sophistication brought by the technology, the depth of the vulnerability is also raising its bar.
As the blockchain is still in the developing stage, the security side of it requires to be dealt with a lot of care to prevent the loss of funds from hacks and scams. Let’s discuss the vulnerabilities that smart contracts are prone to and effective methods that help get rid of them.
A well-designed smart contract is one that incorporates these significant traits
In the process of harmonizing with these attributes also opens them to security hazards. Below let’s find the common issues encountered by smart contracts.
This is one of the common errors wherein, in smart contracts security, smaller units like decimals are used to express the value with utmost precision. This inturn leads to the possibility of integer overflow.
It is a condition where there is a lack of precision, and the integer arithmetic is performed incorrectly. For example, an error in calculating the percentage will cause an integer overflow, resulting in a very large number. This can be rectified by using a secure math library.
When the number of items in the assembly increases, the transaction can quickly exhaust and roll back. That’s why Ethereum sets a block gas limit that makes sure the block does not grow too large.
Usually, the contracts will pass the unit testing with a few users, but as the project grows, the amount of data increases facing this issue. This will affect the funds, making recovery impossible.
Frontrunning attacks result from unattended transactions that are exhibited publicly due to the transparency of the blockchain.
The validators attend the transactions and add to the blocks depending on the transaction fee the user pays. Taking advantage of this, an attacker observes the supply and demand and processes their transaction first by paying a higher fee.
It is a condition resulting from a lack of verification of function parameters or certain operations. For example, the address parameters that are not verified against address zero or failing to check on access control that prohibits the unauthorised user with sufficient token balance to perform operations.
A well-written instruction for functions with the parameters, preconditions and operations to perform helps in neglecting the issue.
Program-specific errors such as typographical errors or specifications mishandled would change the logic of smart contracts. This has a serious impact on security if left unnoticed.
Representing Smart Contract Security Mishaps In Figures
According to the data shared by Defiyield rekt, there have been 33 smart contract exploits amounting to $1.246 billion in losses in 2022.
To mention some of the most infamous exploits,
Penetration testing: Penetrating testing is a method of simulating attacks on the blockchain so to check the flaws that are present. This helps in identifying and fixing security issues..
Penetration testing is done with the approval of the development team by pentesters who have good knowledge of the subtleties of coding and how to use them to one’s own advantage.
It also serves as an effective way to improve the resistance against cyberattacks.
Smart contract auditing: The irreversibility of blockchain transactions is a critical factor to be considered for ensuring project safety. Therefore, smart contract security audits thoroughly investigate coding and make them fit to handle millions of transactions.
Security audits involve four steps,
What Aspects Are Covered In Auditing?
Contract vulnerabilities: Security flaws such as the ones discussed above and others are commonly spotted in the auditing process.
Gas efficiency: Efficiency and optimizations are also part of auditing, apart from checking for vulnerabilities. Optimized contracts save a significant amount of money in transaction fees and reduce the possibilities of failure due to the gas limit.
Final thoughts,
It is always good to see the bigger picture and have a check on the security from time to time for the benefit of the project and community. Make a wise choice and act on it!
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