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WHY AUDIT A SMART CONTRACT BEFORE SIGNING?

A smart contract is a blockchain algorithm that is executed automatically, providing partners with complete confidence in the mutual respect of all interests. All legal and factual agreements are detailed in the form of a code in the format “if..then.” Such a digital document-algorithm actually turns into a third party, the guarantor of the transaction. Because of a high responsibility, smart contracts audit is an absolute necessity.

When Are Smart Contracts Used?

Convenient system and transparency of the transaction attracts those who can easily formalize the terms of the agreement. For example, it is convenient in such areas:

• Transactions using cryptocurrencies or tokens
• Participation in auctions, trading on stock exchanges, some banking transactions
• Meeting loan obligations to banks or major online platforms
• Registration of insurance policies
• Exchange of confidential data (for example, between clinics)

Many banking structures are already working on the implementation of a smart contract system to automate lending services for start-up entrepreneurs, issue mortgages, as well as to automate mandatory payments and reduce credit risks.

Why Is It So Important to Check a Smart Contract?

An audit of a digital contract is to check the code for vulnerabilities, weaknesses, or critical errors. This process is similar to Android pentesting ­ a controlled hacker attack aimed at identifying all possible bugs and shortcomings. After such an “attack,” errors are systematized and provided with comments on how and why they need to be corrected.

Here are the main risks that you will not allow if you use the smart contract audit service.

Potential financial losses

Blockchain transactions often involve the connection of electronic wallets. If there are inaccuracies, a larger amount than was necessary will be paid for the product or service. On the other hand, there is a risk that unprotected code will be intercepted by cybercriminals, and they will use your funds to their advantage.

Business reputation

Compliance with the terms of the agreement is a mandatory aspect for all participants. However, errors in the execution of the algorithm can lead to unpleasant failures that can cast a shadow on your reputation.

Transaction processing time

If the digital signature is already in place, the contract can no longer be corrected or redone. Check the execution logic in advance and also use the Hacken.io service to make sure the code is reliable. In this case, you don’t have to redo it and spend additional time on it.

These are far from all potential risks. But they are enough to consider the audit of a smart contract as a mandatory step before you put your digital signature on it.

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