Smart contracts are the codes deployed on the Blockchain that execute transactions and processes upon meeting specific conditions. Smart contracts are an easy target for cyber-attackers since patching the vulnerabilities after deployment is complex.
Smart contract flaws pose a serious security risk, perhaps resulting in capital collapse and financial losses. Here are a few smart contract vulnerabilities businesses must know.
Reentrancy Attacks
Reentrancy attack vectors occur due to the imperative execution of Solidity smart contracts; every line of code must run before the subsequent code execution. When a contract attempts to make an external call to another contract, the execution of the calling contract stops until the call returns.
A malicious contract, for instance, could make a recursive call back to the original contract asking it to withdraw the resources without waiting for the first call to complete. It restricts the original contract from updating its balance before the function ends.
Since the vulnerabilities occur due to flawed code logic in smart contracts, businesses must design external calls carefully and regularly monitor and update the contract’s state. Additionally, a reentrancy guard prevents multiple function execution by locking the contract.
Gas Griefing
Users must pay a gas fee to run a smart contract on Ethereum or perform a transaction. The gas fee incentivizes validators (miners) to commit the resources required for transaction verification. When a user gives the amount of gas required to execute the smart target contract but not enough to conduct sub-calls, a gas griefing vulnerability occurs.
If the contract fails to assess the availability of the required gas to execute a sub-call, it can adversely affect the application’s logic. While there are no effective practices to prevent gas griefing incidents, businesses must code the contract properly so it sets the amount of gas to send.
Force-Feeding Attacks
Force-feeding attacks exploit developers’ inability to prevent a smart contract from receiving Ether. It becomes easier for hackers to transfer Ether to any contract, force-feeding them to manipulate the balance of Ether.
It is challenging for businesses to prevent contract balance manipulations. Therefore, companies must not use the contract’s balance as a guard since the actual Ether balance might be more than the balance the contract’s internal code expects.
Denial of Service (DoS)
Smart contracts are vulnerable to DoS attacks. Cyber-attacker can use overloading services to block other contracts from executing or to create unexpected contracts. It lets the attacker exploit the values used in financial transactions.
The best way to mitigate these vulnerabilities is by incorporating time-lock puzzles and gas fees to increase the attacker’s costs. At the same time, businesses must ensure that calls are made only to trusted sources to minimize the likelihood of a DoS attack.
Function and Data Exposure
Everyone can access Blockchain; businesses must always encrypt confidential or sensitive information. Likewise, variables and functions are always visible within a smart contract leaving them open for hackers to exploit.
Companies must implement proper access controls and use the least privilege principle with the help of variable and function visibility modifiers to assign and ensure minimum visibility levels.
Timestamp Dependence
The nodes that execute the smart contracts generate timestamp values. Since the Ethereum platform is highly distributed, it is difficult for businesses to guarantee that the time on every node is synchronized correctly.
The node can then use the timestamp value to create a logic attack against any contract on the block. Avoiding this vulnerability is as simple as not using the “block. timestamp” method as a source of randomization or control.
Oracle Manipulation
Smart contracts consume external data from outside the Blockchain with the help of Oracle, letting them communicate with off-chain systems. Manipulated Oracle data can trigger the smart contracts’ execution, called the “Oracle issue.”
Businesses can employ various decentralized or multiple oracles to ensure smart contracts receive accurate data. These Oracles make it challenging for cyber-attackers to exploit or interfere with the data.
Transaction Order Dependence Attacks (Frontrunning)
Smart contracts are visible publicly the moment they are on the network. It enables a block miner to choose the transaction with more fees. Users, for example, can charge a priority fee for getting miners to prioritize their transactions above others.
However, the hacker can use this opportunity to front-run profitable contracts by submitting an identical contract with a higher gas fee to process their contracts first.
Businesses must understand that these attacks are challenging to prevent. The only option is to accept the transaction with a gas price below the set threshold or use a commit-and-reveal schema. Furthermore, numerous smart contract audit tools can uncover frontrunning issues in code.
Also Read: Best Cybersecurity Tools to Strengthen the Organization’s Security Posture
Block Gas Limit Vulnerability
The block gas limit represents how the Ethereum platform uses to ensure blocks from growing too large. It means that if a transaction consumes too much gas, the transaction will not fit in the block, halting the execution of the transaction. It creates vulnerabilities.
Conclusion
Smart contracts are the foundation of the Blockchain space. With rapidly scaling Blockchain uses, vulnerabilities are inevitable. Businesses must build robust security from the initial stages and test its logic and code execution to protect smart contracts.
After deployment, the contract codes are challenging to patch. Hence, businesses must follow robust smart contract security practices to ensure maximum protection. Moreover, companies must assemble smart contract security specialists who can conduct regular audits to determine vulnerabilities by testing every function.
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