An audit is a process in which developers analyze the underlying code and algorithms that comprise systems and applications in order to identify potential flaws or sites of failure prior to release. Audits are often performed by third parties, which helps to ensure that the procedure is carried out in an unbiased and effective manner.

Auditing has been a prevalent practice in the blockchain industry. Many projects depend on it to maintain the integrity of their decentralized protocols' smart contracts and provide additional peace of mind to its users or token holders.

There are two methods for auditing code: Manual and Automated. The manual examination is the most effective way to look for coding problems. It does, however, take more time and a mid-sized development team to implement. Automatic code analysis allows for speedy yet accurate code evaluation. While regular organizations favor the latter, human code inspection is critical for crypto projects since releasing with undisclosed flaws might result in millions of dollars wasted, especially for DeFi initiatives.

A thorough audit consists of five critical steps:

  • Creating a specification
  • Executing tests
  • Using automated symbolic execution tools
  • Manual code analysis
  • Reporting