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The global surge in the adoption of NFTs and cryptocurrencies is coupled with the escalation of the smart contract market valuation. The global market for smart contracts, which was US$150.2M in 2021, is expected to reach US$ 1515.4M by 2032.

The increasing application of blockchain and the dApps in various industries will only further the utility of smart contracts in the coming times. In such a scenario, smart contracts, which are lines of code, should be devoid of malicious intent.

In addition, it ought to be capable of regulating excessive amounts of data and value while all of it operating on immutable logic.

Needless to say, smart contracts are still in nascent phases, and therefore, the complications involved in it lead to the explosion of several hacks and exploits.

That brings us here to take smart contract security seriously and set a bar in developing robust contracts. This article aims to provide a clear picture of well-refined security recommendations during development to improve smart contract security.

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Guidelines To Secure Smart Contract Development

These guidelines will help to reduce risk when creating smart contracts. 

Regulate smart contract operations using set statements

When creating code, to ascertain the rightful behavior of smart contracts, it is ideal to make use of require(), assert() and revert() statements. As any public function can be called by users in the smart contracts on the blockchain, they may lead to inappropriate executions.

Therefore, these statements act as internal safeguards against the problematic deployment of functions. They trigger exclusions to malicious conditions or reverting the state changes if the expected conditions are not met.

Let’s understand the functionality of each statement to put them to good use.

revert(): revert() condition performs the same as if-else wherein the logic is executed on meeting the specific conditions. Otherwise, it triggers exceptions and dismisses the operation.

assert(): An invariant is a logical assertion of the contract’s state, which holds true for all function executions. assert() statement validates the “invariants” and checks for internal errors in the code. It ensures the contract doesn’t reach the vulnerable state.

require(): require() is given at the start of the function to dictate user inputs, state variables, and authenticate the identity of the function that is called. It validates the checklist of whether pre-defined conditions are met and then allows the execution.

Stay vigilant in providing access control when writing smart contracts

Generally, while writing smart contracts, the functions are marked as ‘public/external’ or ‘private’, which defines who can interact with the contract.

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Specifying public visibility for functions allows externally owned accounts (EOAs) to access contracts, and private restricts the access within the smart contract only.

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Therefore, widely distributing the access control to network participants leads to the public performing sensitive operations such as minting tokens. It poses a threat to the funds handled by the smart contract.

Hence, it is a good practice to keep the function accessibility limited to only approved entities responsible for managing the smart contract.

Here are some patterns to adopt for securing access control:

Ownable pattern: In this, the address of the “owner” is set during contract creation itself. Protected functions are only accessible by the owner, and any external addresses trying to call the protected function are reverted.

Role-based access control: Ownable pattern might introduce the problem of centralization risks. An alternative approach is role-based access, wherein the control is distributed across a set of trusted participants.

Where each of the administrators can have access to specific functionalities such as minting tokens, performing account upgrades, etc. Thus, the decentralization aspect is also instilled.

Multi-sig wallets: Multi-sig accounts are owned by multiple parties, and to execute any transactions, signatures of at least 3-5 entities is required. This provides an extra layer of security as the changes in the contract are implemented with the final consent by multiple authorities.

Thoughtful recovery plans

In Spite of the precautions, in case of malicious exploits of contracts, there should be a proper fallback plan to effectively tackle the attack.

Below are some ideas for implementation.

Contract upgrades: Since smart contracts are immutable by default, there is a certain way of upgrading them. The contract upgrade mechanism essentially means splitting the state and logic between two contracts.

The former is called the ‘proxy contract’, which stores the state variables (user balances), and the latter is the ‘logic contract’, which holds the code logic for executing functions. Using the 'delegatecall' function, these two contracts can be made to work together for executing operations.

Event monitoring: Solidity ‘Events’ helps to track any triggers to the smart contract function, such as transaction volume, frequency of function calls, etc. Alerts can be set to these triggers to determine the external interaction that occurs with the contracts.

It allows us to spot any suspicious activity and take critical actions.

In addition to all of the above practices, third-party review of the contract code increases the possibility of catching vulnerabilities. Projects can undertake independent code examination from smart contract auditing firms where they treat the code with specialized tools and testing processes to detect issues.

Bug bounties to incentivize individuals capturing bugs on the code are also an effective approach in amplifying the security of the contract code.

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