The creation of a smart contract is an in-demand skill in the modern blockchain project era. A security audit is a tool for auditors that helps to provide a full analysis of so-called smart contract sets to safeguard the funds invested via them. Special pieces of project code store the blockchain-based transaction records between parties. While direct smart contracts are typically used for basic operations, complex ones have multiple terms, partakers, and outcomes, such as transferring assets across the digital chains.
Yet, developers dealing with smart contracts may occasionally leave vulnerabilities, thus exposing the funds on a blockchain to attacks. The demand for smart contract auditors has increased drastically. Best crypto audit companies, like Hacken, deliver cybersecurity services to bolster the safety of crypto assets. Let’s explore the queries like how to become a smart contract auditor, get your first job, the steps to take in auditing, and even smart contract audit cost.
How to Get Started as an Auditor of Smart Contract Security?
Let’s suppose you are at the beginning of your smart contract auditor path. What should you start with to become a smart contract specialist? Here’s what you need to do to get your first job.
# Study Programming
Since you are seeking some ideas about smart contract security auditing, you should know how to code. If not, then learning how to code needs to be your first step, as you should be able to read auditing code. Hence, being a developer is a requirement, or you will spend a lot of time trying to understand the specific instructions.
So, first, learn to code by joining courses. This step takes plenty of time to learn, whereas retaining the security aspects is much faster.
# Learn ETH Security & Solidity Basics
If you can code now but know nothing about Ethereum and Solidity, then move on to practice. Using the new language in practice and writing the code is the quickest way to learn it. Reading only the blockchain security documents does not make the knowledge stick. The best way would be to combine learning Solidity basics with studying Ethereum network security rather than solving CTFs.
War games/Capture The Flags – CTFs are the security challenges in which a vulnerable code is presented.
# Get Familiar with the Widely used Smart Contracts
You will often encounter particular contracts, blockchain patterns, and algorithms during your auditing career. Please become familiar with them and understand thoroughly the way they work and other specifics to become smart contract auditors. Check out some good documentation.
Token contracts: The most widely used token standards are EIP721 for NFTs and EIP20 for fungible tokens. There are plenty of them, but it is important to know these two first. It’s noteworthy that the original standard ERC20 evolved greatly, and there are new tokens that do not comply with the ultimate EIP20 (notably USDT). Also, pay attention to Ethereum smart contracts at the beginning of your career.
Note that tokens can have various decimals, and they are generally interpreted as a floating-point number along with the decimals precision, namely, 1e18 TOKENS (= 10**18 TOKENS) ~ 1.0 TOKENS for a particular token with 18 decimals. You’ll discover many bugs where some computed token amount is in the incorrect number of decimals.
MasterChef: this is a staking contract where you deposit LP – liquidity pool tokens and get rewards proportional to their time * stake amount named the MasterChef. This smart contract has been forked a great deal, but the primary reason why it’s important is that its specific reward algorithm appears in several places. It would help if you understood how this so-called Billion-dollar algorithm functions and why it’s required in a blockchain world setting.
Proxies: Ethereum smart contract security audits are not upgradeable. You need to use a new contract if you wish to update the code. Nonetheless, that implies that the storage still residing in the original digital contract is also lost. Thus, proxies realize the idea of separating the repository from the logic. Among various proxy implementations, check out the OpenZeppelin Proxy. You need to understand how to delegate calls is essential for building proxies.
UniswapV2: Whereas Uniswap is practically on V3, the Uniswap V2 version is much simpler, less gas-golfed, and is the basis for knowing AMMs – automated market makers overall. It would help if you also discovered how LP tokens work.
Compound: The digital basis for all decentralized peer-to-peer lending protocols is called Compound. You are advised to know it as many DeFi primitives in some way interact with lending protocols. This code is a superb example of proper documentation. Its Governor & TimeLock contracts are likewise used as governance contracts for many other protocols. Please note the similarities between so-called MasterChef’s reward algorithm and the way debt is accrued via borrow Index.
# Learn the Finance Basics
When you begin auditing a DeFi (Decentralized Finance) project, you will need to use many traditional finance terms, and you probably won’t understand anything. Thus, when you see these terms, you’ll find definitions that refer to other words you don’t know. Hence, it can be helpful to go over a beginner finance course that explains the intent of this specific financial instrument. From there, you can deep dive into particular topics.
Finally, your training is over. You will keep reading more code and expanding your knowledge. When the theory part gets tiresome, you can try detecting some issues in real code, for instance, audit contests on Code4rena or bug bounties on Immunefi. Here you can be anonymous, as there’s no need to have a job interview, and the payouts are skill-based.
Getting a bug bounty is a weighty addition if you wish to apply to auditing firms. You’ve found the answer to the question of how to become a smart contract auditor. Let’s move further.
What are Smart Contract Auditing Tools?
Some crypto contract auditors don’t use any tools to perform a vulnerability analysis directly. A well-advised one is the VSCode extension named “Solidity Visual Developer”, which highlights the function parameters and storage variables.
Here are some widely used software packages:
- Smart Check
In addition, Mythril – is also implemented for detecting unit underflows and overflows. Another handy tool is Etherscrape, used actively to scrape live Ethereum documentation for so-called reentrancy bugs. Finally, note that decentralized auditing platforms such as Bountyone combine freelance developers and companies when tools are insufficient.
Where to Get a Job as a Smart Contract Auditor?
As the blockchain technology industry is undergoing a massive growth spurt, novel crypto-focused job sites have appeared to connect capable individuals with the world of Web 3.0. After you become a smart contract developer and gain the required skills, potential specialists can seek auditing vacancies on Web 3.0-specific job boards. As a newbie, you could start with Ethereum smart contracts as a sheer number of documentation and applications is available.
To gain some experience, it is recommended to start taking part in audit contests on Code4rena or bug bounties on Hackenproof. Contests may vary in scope and size, with some rewards of $70,000. Participants can be anonymous, yet many novices get jobs by winning bug bounties.
Note the high salary for hourly rates in a smart contract auditing firm. Besides, such jobs add some weight to a CV of a smart contract auditor.
Consequently, smart contract audits have eventually turned into a regular practice for users and investors. Thus, it is critical to read the audit yourself. The comments and severity of possible issues may be beneficial even if you lack technical knowledge. The smart contract audit process depends on the extent of your project. So, while making an investment choice, make sure that any decision considers all the data.
How do Audits of Smart Contract Security Work?
The classical smart contract audit works in a standard way among current-time audit providers. Though each auditor’s approach may to some extent differ, the typical process is as described below.
Evaluate the audit’s scope. The venture’s specifications and smart contract are defined by the planned scheme and the overall architecture. A plan helps the audit team get an idea of the project’s aims when writing the code.
- Based on the set work amount, provide feedback initially.
- Run both manual review and automated tests to detect security vulnerabilities. Their exact nature may vary depending on the auditing team, approaches, and automated tools.
- Create an initial draft of the report with detected errors and give it to the project team for follow-up fixes and feedback.
- Publish the final statement, given any action performed by the development team to address the blockchain security issues. Now that you’ve submitted your final report, learn how to become a smart contract auditor.
Why do Users Need such an Audit?
With huge amounts of value transferred via smart contracts or locked in them, they become appealing targets for malicious attacks. Furthermore, trivial coding errors can lead to enormous sums of funds being stolen. For instance, the DAO hack on the ETH blockchain took approximately 60 million dollars and even caused a hard fork of the ETH network.
Blockchain-based transactions are irreversible; therefore, ensuring a code is safe is vital. In addition, digital ledger technology’s vastly secure nature makes it problematic to retrieve a user’s funds and resolve the issues following the fact, so it’s wiser to prevent common vulnerabilities beforehand at all costs.
Smart Contract Audit Meaning
An audit of smart contracts is a purely blockchain-focused process in which auditors review the crypto scheme’s code – for bugs, security-centered issues, and errors that may expose the system or its users. A smart contract audit intends to spot and eliminate the venture’s vulnerabilities. An efficient security audit scrutinizes and comments on a venture’s code, shown to the project’s auditors.
Security audits are predominantly valuable for DeFi projects that aim to handle blockchain-related transactions comprising millions of dollars or an enormous amount of users. Generally, developers use a programming language called Solidity and GitHub to write these contracts.
Such audits have already become a standard for serious ventures. For many token users, they are crucial when investing in new ventures. Particular audit report specialists are also accepted as industry leaders, and their audits are seen as valuable in investors’ eyes.
Any IT-literate person can create a smart contract security audit, which can be used on the networks. For that, you should learn the coding language to directly perform vulnerability analysis.
Renowned companies such as Chainlink Labs pay from $100 – 150 k a year. Another option for earning from auditing services is by joining competitions for bugs and industry.
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