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Smart Contract Security

Lesson Objectives

By the end of this lesson, you will be able to:

  • Understand what smart contract security is
  • Distinguish the different types of common vulnerabilities or security risks associated with smart contracts


Smart contract security refers to the security principles and practices used by developers, users, and exchanges when creating or interacting with smart contracts. Blockchain is a dynamic industry worth billions of dollars. Bad actors often seek vulnerabilities in smart contracts to make a quick money. There are several types of comon vulnerailities that a developer should be aware to make sure their smart contracts are secure from malicious attacks.

What does the term Smart Contract Security refer to

A smart contract is a self-executing computer program that is designed to automatically execute the terms of an agreement between parties without the need for intermediaries. Smart contracts are often used in decentralized blockchain networks, such as BNB Chain, Ethereum, etc., to automate complex transactions and create new applications.

Smart contract security refers to the measures taken to ensure that smart contracts are secure and free from vulnerabilities that could compromise the integrity of the agreement or the blockchain network as a whole. Since smart contracts are often used to execute financial transactions or other sensitive operations, any security flaws in the code can have serious consequences, including loss of funds, theft, or even the collapse of the entire network.

To ensure smart contract security, developers need to follow best practices for secure coding, such as performing thorough code reviews, testing the code for vulnerabilities, and implementing proper access controls. They should also use well-established frameworks and libraries, and avoid using untested or custom code.

Additionally, blockchain networks often have their own unique security features, such as consensus mechanisms and decentralized governance models, that help to ensure the security and integrity of smart contracts. However, these features are not foolproof, and developers and users must remain vigilant to potential threats and vulnerabilities at all times.

Common Smart Contract Security Risks/Vulnerabilities

Like any computer program, smart contracts can be vulnerable to security risks and vulnerabilities that can be exploited by malicious actors. Some common smart contract security risks and vulnerabilities include:

  1. Reentrancy Attacks: A reentrancy attack occurs when a smart contract allows an attacker to re-enter the same function before the previous call has finished executing, allowing the attacker to manipulate the state of the contract and potentially steal funds.

  2. Insecure Arithmetic Smart contracts are typically written in a programming language that has fixed-size integers, which can lead to unexpected behavior if an integer exceeds its maximum or minimum value, resulting in the loss of funds or unintended execution of code. The integer overflows and underflows also present another formidable security risk for smart contracts. Insecure arithmetic can also result in vulnerabilities which can help attackers in developing unprecedented logic flows.

  3. Malicious Libraries: Smart contracts may use external libraries, which can introduce vulnerabilities if the library is malicious or contains vulnerabilities.

  4. Time Manipulation: Smart contracts often rely on timestamps to enforce certain conditions, but timestamps can be manipulated by malicious actors, leading to incorrect execution or funds being locked up indefinitely.

  5. Logical Errors: Smart contracts may contain logical errors that allow malicious actors to exploit loopholes or execute unintended code.

  6. Lack of Authorization: Smart contracts may lack proper authorization checks, allowing unauthorized users to execute certain functions or modify the state of the contract.

  7. External Calls: Smart contracts may rely on external calls to interact with other contracts or services, which can introduce vulnerabilities if the external call is malicious or contains vulnerabilities.

  8. Insufficient Gas Limits: Smart contracts require gas to execute, and insufficient gas limits can lead to failed transactions or unexpected behavior.

  9. Governance Issues: Smart contracts may have governance issues, such as a lack of transparency or accountability, that can lead to malicious actors exploiting vulnerabilities or manipulating the contract.

  10. Phishing Attacks: Smart contracts may be vulnerable to phishing attacks, where malicious actors impersonate legitimate contracts to steal funds or personal information from users.

  11. Oracle Manipulation: The manipulation of external data providers, as well as the possible solutions for security issues with oracles, would also affect smart contract security.

  12. Frontrunning: Frontrunning attacks could imply malicious use of the transaction processing approach of blockchain technology. Bad actors could add a higher fee for processing their transactions first, thereby holding off large transactions. When the large transaction reduces the token price, the malicious agents could sell the tokens they have bought.

  13. Timestamp Dependence: The outline of smart contract security best practices would also focus on timestamp dependence. It is generally responsible for attacks associated with a transaction’s timing.

  14. Griefing: Such types of attacks are associated with bad-faith players within a smart contract ecosystem.

  15. Deprecated/Historical: Such attacks are associated with the history and vulnerabilities of the Ethereum blockchain. You can find solutions for such smart contract security problems on the compiler level.

  16. Denial of Service: The smart contract security issues with denial of service attacks generally showcase unexpected reverts alongside a rise in block gas limits.

  17. Force Feeding: Another notable smart contract security risk you must watch out for is force-feeding. It works by forcing the transfer of native tokens (BNB, Ethers, etc.) to smart contracts for the manipulation of balance checks.


It is essential to consider these risks and vulnerabilities when designing, developing, and auditing smart contracts to ensure their security and prevent exploitation by malicious actors.

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