Since DeFi began to explode, a new wave of smart contract attacks has emerged that have resulted in hundreds of millions of dollars in losses. With hacking numbers rising, it’s clear that security is important for smart contracts.
Most vulnerabilities can be avoided during contract development by following best practices. DeFi projects are sometimes rushing to market, with security becoming her second priority. There is a difference between an early stage developer and an experienced developer. Experienced developers have knowledge of security best practices, tools, and common vulnerabilities and can identify security issues early in development.
A smart contract is a digital representation of a contractual agreement in code. Execution of this code is verified and distributed with the help of network nodes within the blockchain network.
This article discusses the human factor behind smart contract security and privacy, and analyzes why developers are still considered the “weakest link”.
What is a smart contract vulnerability?
Because smart contracts run in a decentralized, permissionless network, vulnerabilities arise from failed smart contract executions. Because these contracts have locked funds, they are very attractive targets for hackers, and a successful attack can result in hackers taking funds directly from the contract.
Common vulnerabilities in EVM-based smart contracts include reentrancy, integer overflow, and unrestricted access control. To take advantage of reentrant contracts, call the outer contract. Then call the reentrant callback. Low-level operations such as “send”, “forward”, and “call” are dangerous and can lead to vulnerabilities if exceptions are not handled carefully.
Innovations in the blockchain space are continually evolving, resulting in design flaws in smart contracts. Developers building decentralized applications have to deal with updating the platform they are working on. Blockchain platforms can therefore exacerbate common software flaws such as access control, incorrect computation, and race conditions.
smart contract security tools
Different practices are employed at different levels of the smart contract development life cycle to ensure and harden the security of smart contracts.
Smart contract testing tools: Several tools have been developed to analyze contract source code and scan for known security issues such as reentrancy and overflows. Some of the most widely used tools include Oyente, Maian, MadMax and Vandal.
Development and test environment: Truffle is a popular development framework for smart contracts. Developers can use it to create unit and integration tests. Hardhat is another development environment that helps you run tests, check your code for mistakes, and interact with smart contracts. It runs on your development network. It covers your code, measures gas used per unit test, makes it easy to plug in things like automatically verify contracts with Etherscan. Widely used by browser IDEs that support smart contract testing, development, and deployment.
Code audit: Auditing smart contracts can help mitigate risks associated with dAapps. We recommend performing a smart contract audit when the contract is in the testing phase. Tools used for auditing include Surya, Mithril, and MythX. While automated audits alone are not sufficient to mitigate contract-related risks, manual third-party audits by trusted companies such as QuillAudits are recommended. During an audit, vulnerabilities are primarily detected in three ways:
- Extract functionality from malicious code and do semantic matching with source code.
- Following a mathematical approach to verifying system integrity, the auditor now examines all possible input tests for all potential test cases that may arise.
- Create control flow graphs using contract logic units
Developing secure smart contracts
A closer look at recent smart contract exploits reveals many vulnerabilities due to developer mistakes. Avoiding smart contract loopholes therefore means developing smart contracts safely with the user in mind during the development lifecycle. Many early-stage developers don’t consider security to be a primary factor and lack awareness of smart contracts and his security resources and tools.
Smart contract security insights
Most developers do not keep security as a top priority when developing smart contracts. Here’s why.
- They are asked to deliver the project as soon as possible.So security becomes secondary
- Projects may fork other popular projects
- someone on the team conducts the audit
Apart from that, I often hear developers say that Solidity has inherent limitations to maintain security. It differs from mainstream languages because functions are not explicitly defined. Also, Solidity has no direct language/library support, making it difficult to perform proper string and array manipulation.
Steps a developer takes for smart contract security.
Developers concerned about the security of their smart contracts follow various methods to mitigate risk during the development stage.
- Read between the lines of code and think from the attacker’s perspective.
- Draw a flow chart to analyze the flow of information and look for points where potential fallbacks exist. Graphical representations can therefore be used to solve many logical problems.
- Using smart contract security tools (some of which were mentioned above)
Some limitations of smart contract security tools are important because after deploying a contract, you need to create a constructor and then test the contract. Apart from this, there are no other tools that can be integrated into the development process. You should write your code in an IDE and test it using another tool. Developers find it easier to test code with compilers than with other tools.
We also see that developers with prior knowledge of smart contracts and auditing tend to review code better and be more aware of security best practices. It also helps avoid known vulnerabilities in contracts. Many new developers underestimate security and don’t see it as a priority. This is because we often deploy projects to testnets where contract bugs and loopholes have no real impact.
The security awareness and practices of smart contract developers primarily rely on external audits to ensure the security of their projects. Manual security assessments are often lacking in resources and tools. With the recent rise in DeFi projects and related security attacks, novice developers need help with tools to proactively mitigate risks.