What Happens If You Fail A Dot Audit – Blockchain technology promises to revolutionize entire industries, but hacks and incidents of popular blockchain applications threaten to derail it before it takes off. Shouldn’t the blockchain be secure? It is not that simple.
The sheer amount of hash power exceeds the combined power of the world’s supercomputers that maintain the Bitcoin blockchain. Similarly, the incredible computing power that secures Ethereum. However, while the blockchain itself is secure, the applications running on the blockchain may not be.
What Happens If You Fail A Dot Audit
The application interacts with the blockchain through smart contracts, but like any other software, bugs in the code can lead to security breaches. Unlike many other types of software, blockchain applications often directly control the economy. Bugs can cause serious financial losses, such as in the famous DAO hack.
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In 2016, a year after Ethereum was created, the DAO was born. DAOs, Decentralized Autonomous Organizations, are investment funds that are fully controlled through technical contracts. Unfortunately, there is a bug in the code. Hackers exploited this vulnerability to withdraw $50 million worth of ether from The DAO. Since the DAO is governed independently through its own code, no single player can be called upon to stop a hack once it begins.
While bug-free code is nice to have in other types of software, in a blockchain application, it is essential. To ensure that blockchain applications are secure, smart contract security audits are required to check for bugs and vulnerabilities.
A smart contract security audit is a thorough examination of a blockchain application’s smart contract to address design issues, errors in the code, or security vulnerabilities. A technical inspection by a leading security inspection company usually includes the following steps:
Specifications and other related documents describe the architectural design, design options and construction procedures. By convention, this documentation is included in the program’s README file. White papers and articles, while useful for explaining parts of the code, are no substitute for well-written notes. Without reporting, the review team has no way of knowing what the code is supposed to do and cannot tell if it is working as intended. Therefore, the first step of a good evaluation is to ensure that the project has complete specifications, which are the backbone of the evaluation.
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Analysts often ask when a “code freeze” will occur, meaning that the code is finished. At this stage, the code should be in the final stage of writing: the developer has gone through everything, making sure that the best effort has been made to fix any unusual or unwanted code. A hash of the final version is included in the submissions to the review team to ensure that the project team and the review team agree on the code being reviewed, and that any changes made to the project are not in the review phase.
Testing is the easiest and most convenient way to detect bugs. These range from unit tests that target individual functions to integration tests that address large chunks of code. High test coverage reduces the number of easily detectable parasites entering the test, making everyone’s life easier. In addition, testing helps to ensure that all developers in the team agree on the expected performance and functionality of the project, to avoid confusion during the evaluation. They also serve as informal notes for the researcher, indicating another way to give the researcher an idea of the expected performance of the project.
The simplest test step is to run the test suite. If all the tests pass, then there may be an obvious issue. If the test fails, it’s time to look into the problem and ask the developer if they knew about the test failure before the test. If a high number of tests fail, testing may need to be paused before continuing if the project team needs to restore large or important parts of the code base.
Checking the test line coverage – how much code the test examines – is another important step. Test coverage is usually based on the most tested features, and some tested features are based on less known problems and weaknesses. While all quality assurance engineers aspire to 100% line coverage, 85-90% line coverage per contract is reasonable for most projects. If line coverage falls below 75% for most contracts, the project team should be notified immediately, giving them time to install additional tests before shipping.
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As the need for secure code increases, so does the development of automated bug detection software. The execution simulation tool was developed based on research into vulnerabilities identified in Solidity smart contracts. This tool analyzes the program to determine how the inputs affect each part of the program. The software streamlines the testing process by making it easier to identify common bugs in the code, reducing testing time and freeing up human testers to focus on complex and new vulnerabilities.
The automated Solidity analysis tools are in the early stages of development and therefore far from perfect. In addition, the tool does not know the context in which each part of the code is written. Therefore, it is common for these tools to tell lies and misrepresent the issue. To ensure that falsehoods are removed from reports, manual checks are required for each reported accident.
Automated tools can help detect irregularities easily but may not understand the intent of the manufacturer. In general, software may appear to be harmless but it differs from its intended performance. As a result, manual analysis is required to improve the detection of potential problems.
An experienced audit team digests specifications, then determines whether the project is working as expected or shows deviations, providing recommendations to the project team.
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Often we have several engineers check the code, and then compare their results afterwards, reducing the chance of missing a mistake.
After evaluating through testing, automated evaluation and manual evaluation, the evaluation team should write a project team report, accompanied by time for the two teams to discuss and act on the findings of the report. This last step is the most important to see through the work of analysis in the final project. The project team must thoroughly understand the issues and vulnerabilities identified in the current project, as well as the patches recommended by the review team, and incorporate those recommendations into the project. If time permits, a follow-up interview or review is a good way to ensure that there are no remaining defenses in the program.
The final point is that there is no complete step-by-step guide to smart contract analysis. The standard is still in development, and different teams follow design paradigms. Finally, many important decisions are left to the decision of the review team, and the project team may disagree with the recommendations for personal, ethical or other reasons. While neither side is necessarily better than the other, it takes time to make sure everyone is on the same page about the status of the project. As long as all information is presented for open discussion, the chance of failure will be greatly reduced. With all this in mind, communication and analysis are very important to the success of the smart contract audit.
Nadir Akhtar is a Research Engineer with . The former president of Blockchain at Berkeley, he runs edXcourses in his spare time. He is currently studying Computer Science at UCBerkeley and helping with the Blockchain at Berkeley education initiative.
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In the meantime, please consider preparing your code and documentation according to the Audit Readiness Checklist.
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