Author: Farnoush Nikbakhsh
Due to the rising development of projects related to the field of decentralized finance (Defi), the evaluation and identification of opportunities is of particular importance. There are different ways to invest in this area and in terms of risks in the capital markets, it has gotten a relatively higher security and stability in comparison to trading methods.
Although, it is important to note that in order to save capital and take advantage of these opportunities, one must have a good understanding of the cryptocurrency market and ethereum blockchain. As a result, by using the criteria mentioned in this article, evaluating properly of projects and platforms in Defi could be noticeably a game changer.
In the beginning, to start working on any Defi platform, it is recommended to ensure having a technical review of smart contracts through the performed audits.
Therefore, it is better to use platforms that have at least one audit with an official report and have made it available to the public. Also, if a platform announced an update to be done in its smart contract, be sure to take precautions until it is re-audited.
Software audit is the process by which an individual or team examines the codes of a software. The purpose of this investigation is to detect any bugs, security breaches or breaches related to programming conventions before using the software.
Smart contract auditing plays an important role in assessing the technical risks associated with dApps (decentralized applications), but because they are a relatively "new form of code", the standard for smart contract auditing is in its early stage right now.
Companies such as Chain Security, Trail of Bits and Certik now offer smart contract audits and set specific standards for how to perform an audit. For this reason, as long as the standards are not universal, customers must trust the credibility of these companies to evaluate the quality of their audits.
In the following, in order to review the relevant content, according to the views that exist by experts in this field, we introduce the following topics:
It is an independent review that evaluates the security and accuracy of the codes and has its benefits. Initially, users find an independent opinion on the behavior of these contracts that can alert them to potential threats.
Secondly, Project managers can get a good feedback and take steps to reduce security risks. Likewise, developers use important security advice and related reports. But not all audits are the same. The value of an audit depends on the technology being used and the expertise of the audit team.
A limited audit affects its level of reliability. Usually, before starting an audit, the client sets the desired limits in the code for review, which may not include some parameters in the audit due to the lack of budget and time. As a result, the parameters and access level in an audit report must be specified.
For example, Trail of Bits always mention the following in its audit reports: