Back to blogs
Written by
Cyfrin Team
Published on
April 29, 2024

What is a Smart Contract Security Audit?

Learn what is a smart contract security audit, and how a time-boxed security-based code review on a smart contract or protocol helps enhance their security

Table of Contents

A smart contract security audit is a time-boxed security-based code review on your smart contract or protocol. An auditor's goal is to find as many vulnerabilities as possible and educate the client on ways to improve the security of their codebase moving forward.

Smart contract auditors use manual and automated tools to find these vulnerabilities.‍

In this article, you’ll learn what is a smart contract security audit and why security reviews are important-

Here’s the video related to this article:

Why are smart contract security audits important?

According to a research study by Chainalysis, 2022 was the year the most value was stolen from smart contracts. Due to the immutability of the blockchain, once a smart contract is deployed, you can't change it, so you'd better get it right. The blockchain is an adversarial environment, and your protocol needs to be prepared for malicious users. But even more than saving your protocol from hacks, a smart contract security audit can improve your developer's understanding of code, improving their speed and effectiveness of features moving forward.

Let’s take a look at some of the benefits of smart contract security audits:

image showing the hacks difference between audited and unaudited protocols highlighting the important of a smart contract security audit

Benefits of a smart contract security review

Enhance the security of your protocol and its users by finding vulnerabilities

Level up your engineering team knowledge by learning and implementing state-of-the-art smart contract development best practices

Establish trust with your users and the community - Smart contract audits are vital in communicating maturity and safety to your users.

What is a smart contract security audit?

A smart contract security audit is a comprehensive process where one or more security researchers review a smart contract or protocol codebase to find, report, and mitigate improvements, issues, and vulnerabilities.

Let's take a quick look at the different types of smart contract audits.

Types of smart contract security audits

When we talk about smart contract security audits, we usually talk about two main types:

  • Private audits
  • Public audits

Private smart contract audits:

Private smart contract security audits can be performed by smart contract security companies or solo auditors, usually include one or multiple security researchers specifically chosen by the company or the assigned by the security firm. They happen, as the name suggest, privately, with access to the code given only to the parties involved.

Public or competitive smart contract security audits:

Public or competitive smart contract security audits on the other hand, involve tens or hundreds of security researchers competing to find the highest number of issues in a code base to report them and win a share of a prize pool.

Smart contracts can include thousands, if not tens of thousands, of lines of code. Given this volume, even obvious issues can sometimes be missed. That's why more than a single smart contract security audit is often required. Many protocols undertake a security journey that joins multiple private audits audits, competitive audits, and even Bug Bounty programs.

Both testing tools and human auditors are essential for identifying errors and potential vulnerabilities in the existing code. Here is an overview of the smart contract security audit process.

Despite the type of smart contract audit, let's take a look at how smart contract security reviews usually work:

How smart contract security audits work

1. Security review price and timelines

To get a smart contract audit, a protocol can contact a smart contract security firm before or after its code is finished. Ideally, they reach out some time before so the auditor can have enough time to schedule them.

Once they reach out, the teams will discuss how long the audit will take based on the scope and code complexity. How long the audit will take depends on how many lines of code. A rough approximation of how long an audit takes depending on how many source lines of code you have can be later down in this article.

2. Commit hash, down payment, and start date

Auditors need to know exactly what code they are auditing and will use the commit hash of your repo to do so. Once your code is ready and pushed on GitHub, the security company will usually ask you for the commit hash. Once finalized, you can reach a start date and finalize the price.

3. Run tests with tools

Once the audit begins and the auditors understand your codebase, they will begin using a set of smart contract security tools and automated tests. This is the initial step to identifying simple issues and concentrating on high-severity and more complex problems.

In this phase, the auditors will employ various methods, such as integration tests, static analysis, fuzz testing, and unit testing, to thoroughly examine the security of the codebase.

4. Manual review of code

Image showing what is a smart contract security audit and the various steps in the process

While automated tests can detect basic and some advanced vulnerabilities in the codebase, uncovering more complex and "hidden" issues calls for manual intervention by a smart contract security researcher. By grasping the context and complexity of the code and cross-referencing the project specification and any supplementary documentation, auditors can identify deeper vulnerabilities.When an audit team analyzes the code, it is important to use a mixture of manual and automated testing. This approach is vital to ensure that everything runs smoothly.

5. Initial smart contract audit report

After the initial smart contract security review period, the auditors will provide an initial report to the protocol team. This smart contract audit report will include:

  • Findings listed by severity, typically classified as High, Medium, or Low
  • Informational, Non-critical, or Gas findings
  • Suggestions for mitigation and potential solutions to the issues identified

Once the report is finalized, the mitigation phase will begin.

6. Mitigation

The protocol team will then have an agreed-upon time to address the vulnerabilities identified in the initial audit report. The duration can vary, often much shorter than the audit itself, but may be longer depending on the severity of the findings.

7. Final smart contract security audit report

Following the protocol changes, the audit team will produce a final smart contract audit report focusing solely on the fixes to address the issues highlighted in the initial report. Ideally, the auditors and the protocol team will have had a positive experience and collaborate to ensure future security.

8. After the smart contract audit

We recommend acting on the smart contract audit report findings. Ignoring these warnings can expose vulnerabilities, which are often exploited.Furthermore, if you alter your codebase, this becomes unaudited code and should not be implemented, regardless of the size of the change. If you modify your code, consider having that section audited.Depending on the funds your protocol will secure, an additional audit may be worth considering.

How long does a smart contract security audit take?

The duration of a smart contract security audit primarily depends on the size and complexity of the code. An audit company with the right tools and expertise can typically make a comprehensive report within one to two weeks. However, auditing more extensive applications may require more time. Allocating sufficient time for a thorough security audit is crucial for your blockchain application's success.

How much does a smart contract security audit cost?

The smart contract audit pricing is determined by the duration, with costs varying greatly based on the size and complexity of the codebase. Generally, smart contract auditors may charge anywhere from $5,000 to $60,000 per week, which can increase depending on the protocol's size and complexity.

If you're considering launching a protocol, having your smart contracts audited by an experienced auditing company is a no-brainer. These contracts execute financial transactions and are used for essential functions. Unlike other types of software, it's crucial to have bug-free code to avoid potential protocol and financial-breaking exploits.

How to get the most out of a smart contract audit

1. Write clear documentations

Providing a smart contract security team with ample context, documentation, and information about a given protocol is essential for their understanding. Ensuring anyone can easily comprehend your code and its intended functionality is crucial. Since 80% of all bugs are due to business logic issues, auditors require a clear understanding of the protocol's expected operations more than the actual code itself.

2. Provide a robust test suite

Maintaining a comprehensive test suite that covers a significant portion of your codebase enables auditors to concentrate on issue identification rather than tool manipulation. Before an audit, incorporate fuzz testing unit tests and run a smart contract security tool.

This approach can reduce your costs and minimize the time the auditing team spends reviewing your codebase and looking for surface-level issues.

3. Do an initial video walkthrough of the code

The first step in a smart contract audit should be a high-level video walkthrough. This walkthrough should explain your codebase, describe how the code is intended to function, and guide you where to find answers.

Conclusions - What is not a smart contract security audit?

Remember, an audit does not guarantee that your code is bugs-free. It's a part of your security journey where your team should continually strive to improve.

Regardless of a smart contract auditor's experience, there will always be instances where something is overlooked. If that unfortunate day comes, convene with your auditors on an emergency communication channel and devise a quick solution.

Even the most thoroughly audited protocols may benefit from insurance.

With this information, you should now have a solid understanding of the end-to-end smart contract audit process. Remembering that a smart contract audit is a security journey between the protocol and auditors is important. Maintaining a security-focused mindset is crucial, even after the audit is complete.

If you're looking for an audit, contact the Cyfrin team. And as always, stay safe out there!

Secure your protocol today

Join some of the biggest protocols and companies in creating a better internet. Our security researchers will help you throughout the whole process.
Stay on the bleeding edge of security
Carefully crafted, short smart contract security tips and news freshly delivered every week.