How to Audit a Smart Contract (Basic Checklist)

Why Smart Contract Audits Matter

Did you know over $3 billion was stolen through smart contract hacks in 2022? From the infamous DAO hack to the Poly Network breach, code flaws can cost millions. But here’s the good news: most exploits are preventable with a basic audit.

Whether you’re a developer, investor, or crypto newbie, this guide will walk you through a simple smart contract audit checklist. No jargon, no complexity—just actionable steps to spot risks and protect your project. Let’s dive in!

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What is a Smart Contract Audit?

A smart contract audit is like a safety inspection for blockchain code. Experts (or you!) review the code to find bugs, security holes, or inefficiencies.

Audits are critical because:

• 💰 Smart contracts control money (often millions)
• 🧱 Code is permanent once deployed (no do-overs)

🧨 Example: A typo in a contract could let hackers drain all funds.

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Basic Smart Contract Audit Checklist

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1. Set Up Your Tools

Before diving in, gather these essential tools:

• 🛠️ Remix IDE: A browser-based code editor for Solidity
• 🕵️ Slither: Free tool to scan for vulnerabilities
• 🔐 MythX: Paid tool for deeper analysis
• 🔎 Etherscan: To verify deployed contracts

💡 Pro Tip: Use a testnet (like Goerli) to experiment without risking real funds.

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2. Review the Code Manually

Start by reading the code line by line. Look for:

• 🔁 Reentrancy Risks: Functions that call external contracts before updating state variables

// Bad: External call before state change
function withdraw() public {
    payable(msg.sender).transfer(balances[msg.sender]);
    balances[msg.sender] = 0;
}

• 📉 Over/Underflows: Missing SafeMath checks for integer limits
• 🔐 Access Control: Sensitive functions (e.g., adminWithdraw) not restricted to owners

🕳️ Example: The DAO hack exploited a reentrancy bug, draining $60 million.

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3. Run Automated Scans

Tools like Slither or MythX catch issues you might miss:

• 🗑️ Unused Variables: Dead code that wastes gas
• ☠️ Unchecked External Calls: Risky interactions with other contracts
• ⛽ Gas Optimizations: Inefficient loops or storage writes

🔍 Free Tool Alert: Slither’s open-source scanner is perfect for beginners.

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4. Test Common Attack Scenarios

Simulate attacks to see how the contract reacts:

• 🚨 Front-Running: Can someone exploit pending transactions?
• ⚡ Flash Loan Attacks: Does the contract handle sudden price swings?
• 🌐 Oracle Manipulation: Are external data sources (e.g., Chainlink) secure?

🧠 Example: The 2020 Harvest Finance hack used flash loans to steal $24 million.

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5. Check Dependencies

Many hacks stem from compromised third-party code:

• 📦 Outdated Libraries: Ensure OpenZeppelin contracts are updated
• 🔄 Proxy Contracts: Verify upgradeable contracts have secure admin controls
• 🪙 Token Standards: Confirm ERC-20/ERC-721 implementations follow best practices

🔎 Pro Tip: Use Etherscan’s “Read Contract” tab to verify live dependencies.

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6. Validate Math and Logic

Even small errors can crash a contract:

• 📊 Fee Calculations: Do percentages add up correctly?
• 🎁 Reward Distributions: Can users claim more tokens than intended?
• 🧮 Tokenomics: Is the max supply enforced?

😬 Example: A misplaced decimal in a DeFi contract once locked $80 million forever.

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7. Audit the Test Suite

Good tests prevent post-deploy disasters:

• 🔍 Coverage: Do tests handle edge cases (e.g., zero values, failed transactions)?
• 🧪 Stress Tests: How does the contract handle 10,000+ users?

🧰 Tool Suggestion: Use Hardhat or Truffle for testing frameworks.

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Common Smart Contract Vulnerabilities

• 🔁 Reentrancy Attacks: Hackers re-enter functions before state updates
• ❌ Unchecked Return Values: Ignoring failed ERC-20 transfers
• 🕒 Timestamp Dependence: Using block.timestamp for critical logic
• 🚫 Denial of Service (DoS): Infinite loops blocking transactions

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Free vs. Paid Audits: Which Should You Choose?

• 🧑‍💻 DIY Audits: Use free tools for small projects or learning
• 🏢 Professional Audits: Hire firms like CertiK or ConsenSys for large projects
  • Cost: $5k–$50k depending on scope

💡 Pro Tip: Even a basic self-audit reduces risks by 80%

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The Future of Smart Contract Audits

• 🤖 AI-Powered Tools: Platforms like Certora use AI to predict vulnerabilities
• 🎯 Bug Bounties: Communities earn rewards for finding flaws (e.g., Immunefi)
• 📜 Regulatory Requirements: Governments may mandate audits for licensed projects

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Conclusion: Start Auditing Today!

You don’t need to be a crypto expert to spot red flags. Use this checklist, run free tools, and always test worst-case scenarios.

Remember: A few hours of auditing could save your project from a million-dollar hack.

🚀 Your Next Step: Pick a simple Solidity contract (like a token), run it through Slither, and see what you find. The more you practice, the sharper your skills get!

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Disclaimer

We share experiences and research, but this is not financial, investment, or legal advice. Cryptocurrencies are volatile, and markets can change rapidly. Always consult a licensed financial advisor before making decisions. We are not responsible for any losses, damages, or legal issues arising from your use of this information. Past performance does not guarantee future results. Do your research, assess your risk tolerance, and never invest more than you can afford to lose. By reading this, you agree that you alone bear responsibility for your choices.

Stay informed, stay safe.