The mere appearance of smart contracts was predetermined within the distributed ledger technology. Blockchain was in dire need of mechanisms that would enable the automation of a variety of processes related to the operation of decentralized networks.
However, as time passed, it became clear that the scope of smart contract applications affected nearly all crypto-related domains. Important to the SC operation is the impossibility of modifying the program code once it has been deployed to the blockchain. DecimalChain is an example of a blockchain of the next generation that supports the creation of smart contracts. Decimal, like any other smart contract development company, strives to make the process of SC creation as accessible and secure as possible. SC is characterized by the fact that algorithm-prescribed conditions are executed automatically, thereby triggering the corresponding action instructions.
Such a mechanism eliminates the impact of external factors and does not require the participation of intermediaries (such as, for example, the evaluation of contract terms, which is often subjective or simply unfair).
It would appear that the transparency and lack of ambiguity in the execution of instructions makes smart contracts a superior alternative to traditional paper contracts. In fact, SC has a number of vulnerabilities, some of which share origins with blockchain technology’s flaws and others of which are directly related to the program code implementing SC. Malicious Smart Contract Encapsulation
There is a widely accepted classification of SC vulnerability types:
- Software defects Programmers have frequently joked that even a single line of code contains errors. If a developer of smart contracts lacks sufficient experience and qualifications, particularly in the field of blockchain, it is extremely challenging to avoid these errors. Moreover, while it is easier to identify syntactic errors, logical errors are less obvious. In any case, this results in undeclared properties of the smart contract code, which can be exploited by intruders;
- Errors in the implementation of the architecture of a blockchain-based application. This is where the lack of experience with distributed registries becomes most apparent. Even the most qualified front-end developers are susceptible to infrastructure errors;
- Implementation errors in the smart contract logic. Possibly the most prevalent type, which includes errors at the level of algorithm flowchart and legal implementation in the use of smart contracts. This also includes vulnerabilities specific to the programming languages used to write code;
- Large projects are characterized by vulnerabilities resulting from the inadequate development of certain legal aspects of the use of smart contracts. Specifically, we’re referring to conflicts between the irreversibility of transactions and the legal protection of transactions requiring full or partial access to the distributed registry; subsequently, we’re referring to specific vulnerabilities. During the implementation of consensus mechanisms, they manifest.
Undoubtedly, efforts are ongoing to eliminate or mitigate the damage caused by such vulnerabilities.
Innovative Smart Contract
Since the infamous human factor precludes absolute protection, the majority of such mechanisms are declarative in nature. And this is true for more than just smart contracts.
Preventive measures against software error
The following recommendations are included:
- Creating a number of specific requirements for developers, their qualifications, and work experience in the field of distributed registries;
- Thorough regulation of SC development process based, including a description of business processes implemented by the SC code
- Use of the most up-to-date versions of libraries in which all previously identified vulnerabilities have been eliminated;
- When implementing potentially dangerous external smart contracts, use the NAM rotocol.
- Correcting implementation errors in the smart contract architecture
- Due to the grave consequences associated with such errors, the following technical and organizational measures are required:
- Analysis of the consensus algorithm’s stability when data is entered into the blockchain
- Analysis of critical sections of smart contract code with timestamps
- Monitoring the smart contract’s integrity during testing
- Analysis of the code’s resistance to external DDoS attacks.
And a general recommendation is to consider the programming language’s features when writing the United Kingdom.
Measures to mitigate the effects of errors in the implementation of SC logic
As previously mentioned, this is the most frequent type of error directly related to the operation security of smart contracts. For their prevention, the following preventive measures are implemented:
- Document the SC project at the level of working specifications, as well as the stage of its deployment on blockchain;
- Analyze the compliance of the functions performed by the contract with its documented capabilities
- Limit the possibilities of managing a smart contract at the level of calling external functions (since the use of external procedures is the most common cause of the emergence of functionality that was not originally intended)
- Limig all pows.
Neutralizing legal vulnerabilities
Everything associated with decentralized networks has a legal framework that is poorly developed and frequently nonexistent. Even in nations where blockchain technologies have government support, the situation does not appear to be promising.
To counteract such dangers, the following preventive measures are implemented:
- Contractual fixation of the smart contract’s functionality, including a description of the consequences of meeting all of the code’s conditions
- Description of the procedure for executing a hard fork when critical errors are detected.
Eradication of logical flaws in consensus-building algorithms
These vulnerabilities are regarded as fundamental; their elimination aids in preventing major organizational and technical issues but is frequently impossible.
To prevent them, any service for the development of smart contracts should adhere to the following precautions:
- Comprehensive analysis of the consensus algorithm’s resistance to external threats;
- It is recommended to use hybrid schemes for the implementation of the consensus algorithm to minimize the deficiencies of the basic;
- Special attention should be paid to vulnerabilities directly related to the deficiencies of a particular blockchain. In order to accomplish this, they increase the number of fully functional nodes in a distributed network, provide constant traffic monitoring, and fix the minimum transaction size when forming blocks.
Some of the proposed methods for eliminating smart contract vulnerabilities are of a general nature; they can also be applied to conventional centralized networks. However, the majority of security measures have a specific nature associated with the peculiarities of the blockchain’s operation. Consequently, the mass distribution of SC is reliant on the number of qualified specialists in this field. And once it surpasses a certain threshold, the use of smart contracts will become widespread. In the interim, it is premature to discuss the complete information security of these systems.
Any company that develops smart contracts today employs all security mechanisms for applications operating in this field. Decimal is one of these companies, and it offers its users a variety of secure and rigorously tested applications. Moreover, it is a promising service for the development of smart contracts.