Crypto Asset Security: understand smart contract auditing

Jack from Web3.com Ventures

The cryptocurrency market has seen tremendous growth in recent years, but with this growth comes increased risks. Security vulnerabilities in smart contracts, the backbone of many blockchain applications, have led to significant financial losses. For example, in 2021, the DeFi platform Poly Network suffered a hack resulting in over $600M in stolen assets​. Similarly, in 2022, the Ronin Network, which supports the popular game Axie Infinity, was hacked for approximately $625M​​. These incidents highlight the critical need for robust smart contract auditing.

The Current Auditing Market

The typical smart contract auditing is carried out by specialized firms that offer a range of services to ensure the security and reliability of blockchain projects. Notable players in this area include CertiK, Quantstamp, OpenZeppelin, and Trail of Bits. These firms follow established methodologies to identify and mitigate vulnerabilities in smart contracts. Generally, there are 6 steps in auditing:

• Code Review: Auditors conduct a thorough manual review of the smart contract code to identify any potential security issues, logical errors, or inefficiencies.
• Static Analysis: Tools are used to analyze the code without executing it, identifying vulnerabilities such as reentrancy attacks, integer overflows, and access control issues.
• Dynamic Analysis: Auditors simulate various attack vectors on the smart contract in a controlled environment to observe how it behaves under different conditions.
• Formal Verification: Some firms use mathematical methods to prove the correctness of the smart contract code against a formal specification.
• Penetration Testing: Ethical hackers attempt to exploit the smart contract in ways that malicious actors might, to identify any weaknesses that could be exploited in the real world.
• Reporting: A detailed report is generated, outlining any vulnerabilities found, their potential impact, and recommendations for mitigation.

While this mature auditing pattern is effective in most cases, it also has limitations, particularly in the fast-evolving blockchain market.

Limitations

Traditional auditing tools primarily rely on historical data to identify vulnerabilities. While effective to an extent, this approach is inadequate in the blockchain space where new types of exploits continuously emerge. These tools typically fail to address “unknown unknowns” — vulnerabilities that have not yet been discovered or understood.

Scalability and Efficiency

Current auditing processes can be resource-intensive and time-consuming, often requiring significant manual effort. This lack of scalability makes it challenging to keep up with the rapid development cycles of blockchain projects. As a result, vulnerabilities can go undetected, leaving projects exposed to potential exploits.

Economic and Technical Exploits

Smart contracts and blockchain applications are prone to various types of exploits, including economic exploits like maximal extractable value (MEV) and technical vulnerabilities like zero-day exploits. Traditional audits often overlook these sophisticated attack vectors.

AI and Machine Learning in Auditing

The advent of artificial intelligence and machine learning has revolutionized numerous industries, and blockchain technology is no exception. These advanced technologies bring a new level of precision, efficiency, and scalability to various applications, including the auditing service of smart contracts.

AI and ML can significantly enhance smart contract auditing by automating the detection of vulnerabilities and optimizing the auditing process. These technologies can analyze vast amounts of code and identify patterns or anomalies that might indicate security flaws. Machine learning algorithms, in particular, can learn from historical data and improve their accuracy over time, making them highly effective in detecting new and emerging threats.

Innovative Auditing Solutions

Mamori.xyz

Mamori.xyz leverages advanced machine learning techniques to enhance smart contract security. Their algorithm-based auditing system offers several key advantages:

• ML-Enabled Vulnerability Detection: Utilizes ML-enabled value extraction systems to detect vulnerabilities without relying on prior knowledge of exploit methodologies, making the system robust against novel attack vectors.
• Scalability and Automation: Employs advanced fuzzing techniques to enhance the scalability of the auditing process, enabling developers to spot vulnerabilities earlier and more efficiently.
• Comprehensive Security and Value Extraction: Combines smart contract auditing with value extraction capabilities, optimizing blockchain ecosystems for both security and profitability.

Bunzz Audit

Bunzz Audit offers an AI-based smart contract auditing service that focuses on reducing the costs and time associated with traditional audits. The platform uses a database of previously discovered vulnerability patterns and scans code from over 100 perspectives, ensuring comprehensive and accurate identification of vulnerabilities. Clients can choose between audits that review only the code or a more comprehensive audit that includes project-specific logic.

Audita

Audita integrates AI into its auditing processes to perform automated code analysis and detect vulnerabilities efficiently. The platform uses natural language processing (NLP) to analyze smart contract documentation and provides predictive analysis based on historical data. Audita emphasizes the need for a hybrid approach, combining AI-powered tools with manual audits to ensure comprehensive security.

SolidityScan

SolidityScan focuses on automated vulnerability detection using machine learning algorithms. The platform performs static analysis on smart contract code to identify common security issues such as reentrancy bugs and overflows. SolidityScan also employs NLP to extract relevant information from audit reports, making the auditing process more efficient.

Conclusion

The integration of AI and ML into smart contract auditing marks a significant advancement in the field of blockchain security. Innovative solutions from companies like Mamori.xyz, Bunzz Audit, Audita, and SolidityScan demonstrate the potential of these technologies to enhance the efficiency, accuracy, and scalability of smart contract audits. By leveraging AI and ML, these solutions provide robust protection against both known and unknown vulnerabilities, ensuring the integrity and security of blockchain ecosystems.

Disclaimer: The information provided in this article is for educational purposes only. It should not be considered financial advice. Please consult with a professional financial advisor before making any investment decisions.