Ethereum Developers Propose On-Chain Smart Contract Audit Reports

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Ethereum Developers Propose On-Chain Smart Contract Audit Reports

In a recent proposal put forth by Ethereum developers, a new smart contract standard aims to make smart contract audits for DeFi protocols easily accessible to users. The proposal, known as ERC-7512, has sparked lively discussions among developers since it was first published on the Ethereum Magicians forum.

The proposal was initiated by Richard Meissner, the co-founder of Safe, and received contributions from developers representing prominent Web3 security firms such as OtterSec, ChainSecurity, OpenZeppelin, Ackee Blockchain, and Hats Finance.

The main objective of ERC-7512 is to establish a standard for on-chain representation of audit reports. These reports can then be parsed by smart contracts, allowing users to extract relevant information about the audits themselves. This includes details such as who performed the audits and which standards were verified. The proposal highlights the importance of verifying on-chain that a contract has undergone an audit, as this provides stronger security guarantees and enables better composability.

While the proposal has garnered broad support from the community, developers are currently engaged in discussing the finer points of how to implement the standard. Some developers, including Dexara, the founder of Callisto Network, have expressed the opinion that the proposed implementation is overly complicated. As an alternative, they suggest utilizing a registry that organizes audits through non-transferable Soulbound Tokens. However, Meissner argues that solely relying on a registry would adopt a more centralized approach.

Meissner clarified that the proposed ERC could still be used alongside a registry, but its primary focus is to standardize what auditors should sign and not to define the registry itself. This is meant to ensure consistent verification across the entire ecosystem.

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It is important to note that while security audits are valuable, they do not guarantee that a protocol’s code is completely invulnerable. A recent example is the launch of BANANA, a token for a Telegram trading bot. Despite the team claiming that the code had undergone two audits, a bug was discovered in the smart contract just hours after deployment. This incident highlights the complexity of ensuring foolproof code.

In response to the proposal, Twitter user punk9059 put BANANA’s code through an AI chatbot called ChatGPT, which immediately identified the problem. This demonstrates the potential of leveraging AI technology to assist in identifying vulnerabilities and enhancing the security of smart contracts.

The Ethereum community is eagerly awaiting further discussions and iterations of the ERC-7512 proposal, as it holds the potential to enhance the transparency and security of DeFi protocols. By making smart contract audit reports easily accessible on-chain, users will have greater confidence in the protocols they interact with, ultimately promoting a more secure and robust DeFi ecosystem.

Frequently Asked Questions (FAQs) Related to the Above News

What is the ERC-7512 proposal?

The ERC-7512 proposal is a new smart contract standard put forth by Ethereum developers. Its main objective is to establish a standard for on-chain representation of audit reports for DeFi protocols.

Who initiated the ERC-7512 proposal?

The proposal was initiated by Richard Meissner, the co-founder of Safe.

Which security firms contributed to the proposal?

Developers from prominent Web3 security firms such as OtterSec, ChainSecurity, OpenZeppelin, Ackee Blockchain, and Hats Finance contributed to the ERC-7512 proposal.

What is the purpose of ERC-7512?

ERC-7512 aims to make smart contract audits easily accessible to users by providing standardized on-chain representation of audit reports. This allows users to extract relevant information about the audits, such as the auditors involved and the verified standards.

Why is verifying on-chain audits important?

Verifying on-chain that a contract has undergone an audit provides stronger security guarantees and enables better composability in the DeFi ecosystem.

Are there alternative approaches to the proposed implementation?

Yes, some developers have suggested using a registry that organizes audits through non-transferable Soulbound Tokens as an alternative. However, the proposal's initiator argues that solely relying on a registry would adopt a more centralized approach.

Do security audits guarantee completely invulnerable code?

No, security audits are valuable but do not guarantee that a protocol's code is completely invulnerable. There can still be bugs or vulnerabilities, as seen in the case of the BANANA token, which had undergone two audits but still had a bug in its smart contract.

Can AI technology be used to enhance the security of smart contracts?

Yes, leveraging AI technology, such as in the case of using an AI chatbot called ChatGPT, can assist in identifying vulnerabilities and enhancing the security of smart contracts.

What is the potential impact of the ERC-7512 proposal?

The ERC-7512 proposal holds the potential to enhance transparency and security in DeFi protocols. By making smart contract audit reports easily accessible on-chain, users can have greater confidence in the protocols they interact with, promoting a more secure and robust DeFi ecosystem.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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