A smart contract is considered a secured stored procedure because the technology’s execution is strictly enforced and not easily manipulated. Because smart contracts are legally enforceable and maintain payment integrity between parties, more and more industries are turning to smart contracts for their transactions.
However, smart contracts can be exposed to certain security vulnerabilities because of the transparent nature of the blockchain. But while there have been cyberattacks on blockchain/smart contracts in recent years, there has been much progress in the planning, designing, and development of smart contracts to remove vulnerability exploits and mitigate the risks of cyberattacks.
Increasing trust in smart contracts
Smart contracts can become compromised due to unhealthy security environments and poorly implemented security measures. To prevent potential vulnerabilities in smart contracts we should adopt at least the following three practices:
1- Develop smart contract coding based on cybersecurity best practices
Leaders in smart contracts and cybersecurity are already using different programming languages in smart contract design, implementation, and deployment. Some of the best practices include using plain English, keeping as much of the code off-chain, using well-tested/ certified libraries, and using cryptography for wallets of privileged users.
2- Functional and non-functional testing
Functional and non-functional testing of a smart contract can be used to validate and correct the contract’s behavior before it’s officially implemented. With non-functional testing, security and performance should be considered to ensure optimal executions and the detection of common vulnerabilities such as reentrancy, underflows, and overflows. Performance assessments would analyze contract code statistically and dynamically, recognizing potential threats and resistance weaknesses.
With functional testing, verification of the business rules or requirements should be the focus, including boundary values and argument combinations. Compliance with industry standards should also be determined during functional testing, ensuring that the smart contract’s interface and user applications meet relevant industry requirements.
3- Perform regular smart contract cybersecurity audits or certifications
Smart contracts may be securely developed and achieve compliance with industry standards; however, hackers continue to evolve and create new ways to exploit security vulnerabilities. Therefore, penetration testing and security audits for smart contracts should be conducted at least once before issuance and performed periodically. During periodic testing, look for style inconsistencies and potentially vulnerable codes. The best practice would be to perform penetration testing in-house by a skilled security team. If you do not have an experienced internal security team, partner with a trustworthy external security team that can do a dynamic analysis of your code and conduct a security audit.
Automated vulnerability scanners can also help prevent attacks by performing security analysis of the smart contract. High-performing vulnerability scanners will provide the details of the vulnerability, affected components of an application, vulnerability impacts, suggested fixes, and steps to reproduce.
Considering the complexity of smart contracts and the rising cybersecurity threats, we believe there should be a standard for smart contract cybersecurity. Furthermore, the only way to increase the trust in the level of cybersecurity robustness of solutions based on smart contracts is to have objective, recognised and comparable testing results. Thus a cybersecurity certification scheme suppored and recognized by the whole industry is a must have. It would be recognized and accepted throughout all industries and follow best practices set up cybersecurity leaders.