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Smart Contract security in 2023:

A Simple Checklist

Mike Danilchyk
Founder, CTO of Web3soft Blockchain Development company
In the dynamic landscape of blockchain technology, the evolution of smart contracts has been nothing short of revolutionary. These self-executing, tamper-proof lines of code have held the promise of revolutionizing various industries by automating tasks, cutting out middlemen, and enhancing transparency. However, as the blockchain world keeps shifting and growing, so do the dangers and weaknesses linked to smart contracts.

In this article, we'll explore the crucial topic of smart contract security and provide you with an easy-to-follow checklist to make sure your digital contracts stay safe and sound.
What are smart contract vulnerabilities?

Smart contract vulnerabilities are weaknesses or flaws in the code of a smart contract that can be exploited by malicious actors to achieve unintended or harmful outcomes.These problems can lead to financial losses, security breaches, and other undesirable outcomes.
For clarity, let's look at some common smart contract vulnerabilities:

  • Reentrancy Attacks. Imagine a smart contract is a series of interconnected rooms, and you need a key to enter each room. A reentrancy attack occurs when an attacker finds a way to enter a room (execute a function) without using the proper key (authorization) and then messes with the contents of that room (data) before anyone notices.

  • Unchecked External Calls. Smart contracts can interact with other contracts. If a contract doesn't properly check the result of an external call, an attacker can deceive it into thinking a malicious contract is safe to interact with.

  • Uninitialized Variables. Uninitialized variables can lead to unpredictable behavior, allowing attackers to exploit the contract's state.

  • Permission Issues. Smart contracts often have different levels of access control. If permissions aren't set correctly, unauthorized users might gain access to certain functions or data, leading to misuse.

  • Gas Limit Exhaustion. Blockchain transactions require "gas" (a fee) to be executed. If a contract performs too many computations or loops indefinitely, it can run out of gas, leading to a failed transaction and potential losses.

  • Denial-of-Service (DoS) Attacks. An attacker can intentionally create conditions that make a contract extremely slow or expensive to execute, effectively disrupting its normal operation.

  • Lack of Upgradeability. In some cases, it's essential to update a contract's logic or fix vulnerabilities. Contracts without upgrade mechanisms may be stuck with vulnerabilities once they're deployed.

Smart contract developers need to be aware of these vulnerabilities and take steps to mitigate them, often through careful code review, testing, and adherence to best practices for secure contract development.
10 Best Practices for Smart Contract Security in 2023

#1 - Choose Trusted Languages and Tools
Stick with well-known programming languages like Solidity (for Ethereum) and trusted development tools such as Remix or Truffle.

#2 - Follow Secure Coding Guides
Embrace established coding standards and guidelines, like those offered by ConsenSys Solidity or the Ethereum Foundation. Keep your code clean and understandable to prevent vulnerabilities.

#3 - Thorough Code Checkups
Have experts review your code thoroughly for security issues. Automated analysis tools can also lend a hand.

#4 - Formal Verification
Consider using formal verification tools to prove your smart contract's security mathematically. This can help spot problems before deployment.

#5 - Testing Galore
Test your smart contract extensively using various testing levels, including unit tests, integration tests, and full-scale network tests on platforms like Ethereum's testnets.

#6 - Access Control Rules
Limit who can interact with your contract and what they can do. Follow the principle of least privilege to restrict access to sensitive functions.

#7 - Smart External Calls
Be cautious when making external calls. Check return values and handle errors to prevent security issues. Follow the checks-effects-interactions pattern for added safety.

#8 - Stay Updated
Keep your dependencies, such as smart contract libraries and tools, current to minimize known vulnerabilities.

#9 - Transparent Docs
Keep comprehensive documentation for your contract, explaining its purpose, functions, and security features. Consider open-sourcing your code for community inspection.

#10 - Stay Informed
Stay up-to-date with the latest in smart contract security and blockchain tech to adapt to evolving threats.

By following these simplified best practices, developers and organizations can contribute to the overall security of blockchain applications and significantly reduce the risks associated with smart contract vulnerabilities.
Future directions

Speaking of smart contract security, I believe it's very important to put things into perspective and realise all the future possibilities and promising areas of growth.

Enhanced Security Tools and Libraries
I'm sure, we can expect specialized security tools and libraries tailored specifically for smart contracts. These resources, including automated vulnerability scanners, secure coding frameworks, and standardized security libraries, will give developers more precise ways to find and fix vulnerabilities.

Cross-Chain Security
With blockchain interoperability becoming more common, ensuring the smooth and secure interaction of smart contracts across different blockchains will become a major priority. This cross-chain security will be crucial for the future.

Collaborative Knowledge Sharing
Collaboration within the blockchain community will pick up speed. Open-source initiatives, conferences, and workshops will continue to facilitate the sharing of best practices, experiences, and the latest security research. Together, these efforts will drive innovation.

Security Auditing Evolution
The practice of auditing smart contracts will become more advanced and standardized. Automated code analysis tools will take center stage, and the focus will shift towards proactively identifying and preventing vulnerabilities.

AI and Machine Learning Integration
AI and machine learning algorithms will play a role in detecting anomalies and security threats within smart contracts. Predictive models will improve proactive security measures.
In Summary

Smart contracts are the backbone of blockchain systems, making their security a top priority and developers can effectively reduce the risks linked to smart contract vulnerabilities by adopting best practices. Enhancing smart contract security can be achieved by utilizing auditing services and implementing advanced technologies, including formal verification tools, secure development frameworks, and bug bounty programs. These measures contribute to bolstering the overall trustworthiness of blockchain systems.

The future of smart contract security is bright, but it also comes with its share of challenges. Expect automated tools for detecting vulnerabilities in smart contract code and improvements in secure oracles, propelling blockchain security to unprecedented levels of excellence. With these advancements, we can confidently navigate the evolving landscape of blockchain technology while safeguarding the integrity of our digital agreements.
How Web3soft can help?

Web3soft is a trusted Web3 provider with years of experience in blockchain and smart contracts development. We know how fast the market moves and offer 100% secure blockchain development services, from consulting to developing complex blockchain-based solutions.

Contact us for further consultation on smart contract development and audit and reduce risks, speed up the process and result in a successful blockchain ecosystem implementation.