Auditing smart contracts is critical to establishing trust in their reliability and associated dApps, blockchain projects, and the broader DeFi landscape . Summary Proponents of smart contracts suggest that they have the potential to greatly reduce the costs associated with contract drafting and any subsequent court intervention arising from contractual ambiguities. However, it is possible that the risks associated with a poorly structured smart contract outweigh any measurable cost savings. One way to potentially mitigate the pitfalls that could come from relying solely on smart contracts is to audit them. What is a smart contract audit? As smart contracts have become more and more common, several companies have launched with the aim of acting as smart contract auditors. Smart contract auditors are usually blockchain developers who want to understand how to interact with the technology. Once smart contract auditors have received the finished code of a smart contract, they often perform an analysis similar to what a developer might do for any code or software. This process typically includes writing documents that explain the architecture of the smart contract, troubleshooting, manually analyzing the code, and testing the smart contract to make sure it works as intended. Vulnerabilities that audits could detect can include those common to all software, such as a vulnerability to denial of service (DoS) attacks, as well as those that are unique to blockchain software. A concern that may arise with smart contracts built by Ethereum in particular are the gas limit problems. When transacting on the Ethereum blockchain, the platform many smart contracts are built on, you must spend what is known as gas, which is a fee charged for using the platform. Gas limits that are too high or too low can cause inconveniences or delays in the execution of smart contracts. Smart contracts generally require higher gas limits than simple transfers on Ethereum. An audit could assess whether the gas limit set in a smart contract could cause problems in the future. For your smart contract security audit, it is important to select a reputable company or service. For simple smart contracts, automated tools may be enough to ensure your smart contract is coded correctly. For more sophisticated smart contracts, an experienced auditor can find rare or hidden vulnerabilities. They can also provide you with a comprehensive report that clearly describes those vulnerabilities and provides practical guidance on how to fix them. What is a smart contract “trick”? In general, software can be pirated when a bad actor gains access to the source code and edits the program or installs malicious code. When transactions are hashed or added to a blockchain, they are generally not vulnerable to hacking types that enter malicious code or change the code entirely. However, if smart contracts are not properly built and audited, there is a risk that a hacker will discover holes in poorly coded smart contracts and then execute the contract in a way that the parties did not anticipate. The most notable example of this vulnerability was The DAO Hack from 2016. A decentralized investment fund focused on investing in blockchain companies is DAO. As the investment dollars poured in, the developers realized that there were vulnerabilities in the smart contract underlying the DAO. The vulnerability in the smart contract was later exploited by a hacker who built a smart contract to interact with the DAO and steal the invested funds. This event in the Ethereum and cryptocurrency worlds will always be known as a “hack”, but technically, the smart contract worked exactly as designed. The hacker did not change the source code or install malware, but simply found a vulnerability that allowed them to interact with the DAO according to the way their smart contract was designed. The DAO Hack caused Ethereum to fork so we now have Ethereum (ETH) and Ethereum Classic (ETC) after some Ethereum stakeholders decided to go back to an earlier version of the blockchain to recover the hacked funds. This experience made it clear that auditing smart contracts is critical to the longevity of blockchain projects using this automated technology, especially when dealing with large sums of money. While smart contracts are immutable once they are added to the blockchain, they are still vulnerable to hackers if they are not built and audited correctly from the start. Participating in a comprehensive audit is crucial to ensure the long-term viability of any smart contract.