Near Smart Contract Audit

Since the rise of blockchain networks and decentralized finance platforms, smart contracts have become the forefront of the entire digital infrastructure. They cater to almost every business and industry segment with a variety of use cases and applications. From IoT and Finance to Supply Chain and Gaming Industry, the traces of smart contract implementation is seen everywhere in our daily life. 

And because these contracts work with high-value resources, including intellectual property and physical assets, and have the authority to verify and facilitate financial transactions, the aspects of consistency and blockchain security come to the first plan. 

Therefore, smart contract auditing becomes an essential part of the overall security system of any enterprise to identify possible smart contract flaws and vulnerabilities. So, let’s move on and find how the process of a smart contract security audit of Near Protocol is performed and what are its main benefits in this article.

Why Is The Near Smart Contract Security Audit Important?

Currently, one of the most concerning problems for deploying smart contracts is indeed security. It is primarily because a developed smart contract code’s insufficiency, misbehavior, and safety issues can lead to irreversible damages, including legal charges and extraordinary financial assets losses. Furthermore, even the most minor flaws in a smart contract code written can result in data leakage and theft of a large sum of funds or crypto assets. One such example can be the DAO breach on the Ethereum blockchain, which seized about $60 million in ETH and resulted in the hard fork of an Ethereum network.

As a result, smart contract auditing has become a must for almost every business to avoid such harmful scenarios. Here, let’s review some of the most crucial reasons making the process of smart contract audit irreplaceable.

  • Avoid Costly Code Errors: Auditing the smart contract code early in the development phase before enterprises launch helps to eliminate the possibility of potentially fatal errors and security vulnerabilities. 
  • Prevent Security Attacks: While writing and deploying the code, smart contract developers can keep an eye on existing flaws and take preventive measures against hacking attacks.
  • Expert Review: Generally, to avoid spurious results, the security team of auditors manually double-check your contract code.
  • Continuous Security Assessment: The process of smart contract auditing allows you to perform constant security assessments that improve the development environment. 
  • Enhanced Security: A thorough review assures businesses that own decentralized products that their code is highly secure and the risk of exploits is minimal.
  • Analytical Audit Report: At the end of the audit, you will receive an executive summary of vulnerability details and mitigation advice in the vulnerability report.

Who Audits Near Smart Contracts?

The auditing process can be performed either by the company’s internal team of security professionals or special smart contract auditing firms. The choice depends mainly on the project’s goals and the company’s budget. Here are several popular Near smart contract audit companies you can look through:

  1. Hacken: This is a well-known blockchain and smart contract security company specializing in smart contract audits and pentests. Hacken’s team has already performed over 700+ audits across famous protocols, including FTX, Avalanche, VeChain, and Huobi.
  2. Chainsulting: Another popular name among smart contract audit firms is indeed Chainsulting. The company’s primary focus is on verifying smart contracts’ code integrity and security. They also offer services related to software development, consulting, digital wallets security, and the development of decentralized applications.
  3. SolidProof: This audit firm mainly uses manual and automated testing to review and evaluate blockchain projects and smart contracts to check for potential vulnerabilities. Once the audit is complete, SolidProof’s team provides a detailed report classifying the identified security issues and offering recommendations and solutions to remedy them.

How Much Does a Near Smart Contract Audit Cost?

Though each smart contract audit is individual and the cost of the provided audit process varies from project to project, there is an average estimate based on various statistics and price lists of smart contract audit companies: the average cost ranges between $5000 and $20000. 

Generally, the final smart contract audit cost depends on various factors such as the intricacy of the code, the scope of the project, company requirements, auditing specifics and methodologies, and the expertise of the auditing team. 

And these factors are also actual for determining the duration of smart contract audits. Depending on the size, urgency, and complexity of a smart contract, the audit process can take two days or several weeks. For example, complex DeFi projects and platforms require a longer time compared to simple, smart contract audits. 

General Smart Contract Auditing Process

The security audit process can slightly differ depending on the smart contract auditing firm and the project’s specifics. Below are the typical steps that almost every smart contract audit company follows. 

#1 Gathering The Specification Terms and Conditions 

The core step in performing a smart contract audit is collecting all necessary specifications and condition terms in one place. These materials and data help the smart contract project team fully understand the basics and foundational architecture of the written code, prioritize the most vulnerable components requiring immediate assessment, draft an initial report of further activities, and determine the security audit methodologies.  

#2 Manual Code Review

After gathering all the required materials and specifications, auditors can move on to the next step of the smart contract audit and begin the process of manual review. During this phase, the security team checks each line of the smart contract’s code for potential errors and flaws and then verifies whether the contract follows the original predetermined agreements. Once done, the project team can also run multiple automated tools and tests for a more comprehensive assessment.

#3 Unit Testing 

When the manual review is completed, the smart contract audit team can already start running the test suite, including the integration tests and unit test cases. Through unit testing, the company can thoroughly check the functions of smart contracts and ensure they run properly without any disruption or errors. 

#4 Final Audit Report

The finishing point of smart contract audits covers the technical audit report. When the security audit is done, the smart contract auditors’ team presents a final report, which includes a detailed list of current security vulnerabilities and several approaches to solving and fixing the existing problems. Additionally, they also provide helpful resources and recommendations and remediation solutions and options to minimize the possible risks. 

Depending on the smart contract audit company, additional post-auditing services and features can also be provided, such as retesting, monitoring, and revising the smart contract.

Smart Contract Audit: Process Methodology 

Smart contract audit services provide checks and reviews for detected vulnerabilities that refer to each smart contract’s specific business logic. Moreover, smart contract auditors carefully assess and verify that the contract code is free of access control and logical concerns. Methodology and techniques for smart contract security audits generally vary from one project to another. However, most of them use the two commonly applied approaches of auditing: manual testing and automatic analysis.

Below let’s review each of them in detail. 

Manual Testing

The manual code analysis approach to smart contract audits involves the company’s internal development team that checks the smart contract code line by line for re-entrancy, compilation, or other security issues. Manual analysis can also help the in-house team detect vulnerabilities and errors that were overlooked in the development stage, including poor encryption. 

Furthermore, as manual analysis discovers even hidden defects and flaws such as design difficulties and problems rather than simple code errors, this approach is regarded as the most complete and accurate. 

Automated Testing

Contrary to manual code review, automatic code analysis utilizes bug detection software and other automated tools to help auditors find the exact location responsible for mistakes and errors through penetration testing. Generally, this method is highly effective for auditing a smart contract project that requires faster time-to-market and needs to find existing vulnerabilities faster in order to correct errors quickly. For example, the majority of developers creating Ethereum smart contracts often use Truffle to perform automatic code testing.

However, the disadvantage of automated tests is that they can miss several vulnerabilities while reviewing the code and fail to understand the context.

Common Smart Contract Vulnerabilities 

Although the list of possible flaws and security issues common to smart contracts is long and wide, there are multiple, widespread vulnerabilities we will explore below.

Timestamp Dependency

Unlike the majority of specific programs, the execution environment of smart contracts is on the miner’s side. Simply put, when a smart contract’s logic depends on the current time, the miner can easily manipulate the time to influence execution results and disrupt the predetermined goal. 

Reentrancy Errors

A reentrancy attack is one of the most devastating problems in the NEAR smart contracts. It mainly occurs because of the developer’s carelessness and can lead to irreversible damages. In case of a reentrancy attack, smart contracts function in an attempt to drain funds and make an external call to another untrusted smart contract. 

Function Visibility Errors

Generally, the default visibility property of NEAR smart contract functions is public, which means anyone can easily access and destroy it if the developer doesn’t refine the visibility of the project’s smart contract. 

Spelling Mistakes

Typically, developers use constructors for determining the owner of a smart contract and its initialization. During the programming, the compiler can not notice the misspelling of the smart contract functions, resulting in the process becoming public. 

Failure In Differentiating Contracts and Humans

In some cases, the code can fail to identify whether a smart contract caller is a person or a result of unexpected repercussions. 

Random Number Vulnerability 

This threat occurs when a hacker can accurately guess the generated random number by the smart contract. As a result, the attacker can access all the details and data stored on the smart contract.

FAQ Section

Are Near Smart Contracts Audited?

Smart contracts are the driving power of all platforms and products using blockchain technology, so their security and constant auditing are undoubtedly one of the priorities of digital society. Due to Near smart contract audits, companies can quickly identify potential flaws and vulnerabilities of the written code and fix them before the app’s or product’s launch to avoid future security exploits and data leakage.

How do I prepare for a Near smart contract audit?

Here are multiple steps you can follow when preparing for a Near smart contract audit:
Collect The Technical Documentation: Prepare a clear, simple, and concise description of the smart contract you are building, including the goals and objectives. Additionally, your documentation should include the specifics of the overall system and other technical aspects of the written code.
Clean Up The Code: Before the auditing, run a litter on your contract code to fix the existing errors and to address the warnings coming from the compiler.
Freeze The Code: Freezing the code is an essential step you need to do before the auditing process begins. So, freeze the contract’s code, halt development, and relay a particular git comment hash to finish the required preparations.