The decentralized finance (DeFi) boom has created a growing demand for smart contract audit services. With blockchain companies developing an increasing number of platforms powered by smart contracts, the need for experts to review these contracts has surged. However, an audit can be expensive, depending on several factors.
This article will explain smart contracts and the factors influencing their audit costs.
What Is A Smart Contract?
A smart contract is a digital program stored on a blockchain that automatically executes when preset conditions are met. Smart contracts have many applications, but the most common is in DeFi apps, where they enable multiple parties to transact seamlessly without intermediaries.
Blockchain contracts offer many benefits, including facilitating speedy and convenient digital transactions. However, these programs are vulnerable to hacking and other malicious cyber attacks. Any little arithmetic or technical bug can be exploited to steal funds, and developers must be adamant about identifying and fixing such bugs. That’s why all programs must be audited before they’re deployed for public use.
What Is A Smart Contract Audit?
It is a comprehensive analysis of a contract’s codebase to detect and fix vulnerabilities that could be exploited to steal funds and sensitive data. The audit must be conducted by blockchain and cybersecurity experts– it’s not advisable for a developer to personally audit their app.
What Factors Influence Auditing Costs?
These are the main factors influencing a smart contract audit cost:
1. Code volume
An audit centers on reviewing the codebase, so the code volume is the primary factor affecting the cost. The larger the codebase, the more time it takes for auditors to review it for flaws. Auditors often charge per hour or daily, so longer time equals higher costs.
An extensive audit takes anywhere from a few days to a few weeks. It can sometimes take months, e.g., auditing a full-fledged cryptocurrency exchange.
2. Complexity
Complexity is another vital factor influencing auditing costs. The more complex a contract is the more mental effort required to review it. Blockchain programs with advanced features require significant labor and time to verify their features and identify flaws. Contracts integrating with third-party services require line-by-line reviews to ensure the integrations don’t introduce bugs.
Expect to pay more money if you’re building a complex blockchain app with advanced features.
3. Blockchain platform
The blockchain on which a contract is hosted plays a significant role in its auditing costs. Blockchains have different gas fees, storage fees, and transaction execution processes. For example, auditors might spend significant fees to review an Ethereum-based contract but little to review a contract hosted on another blockchain. The Ethereum fees will be passed on to the program’s developer, meaning higher costs.
Likewise, expect to pay less if your contract is hosted on a popular blockchain system like Ethereum and Polygon. If you’re using a relatively obscure blockchain, you might struggle to find auditors with sufficient experience. Even when you find them, they’ll likely demand a high price because of their skill and experience rarity.
4. Choice of auditor
Different auditing firms have different prices. The one you choose plays a critical role in the audit costs. Experienced and prominent firms charge higher prices than lesser-known ones with limited experience. However, note that a high price for an audit is usually worth it, especially if your blockchain program processes high-volume financial transactions.
What Is the Average Cost Of An Audit?
Auditors typically charge $5,000 to $15,000 for their services. However, audits for simple contracts can cost as low as $500 to $1,000.
