Technical Definition

Audit

A review of a project's smart contract code by security specialists looking for vulnerabilities.

By Crypto University Editorial
BlockchainTransactionWallet

✦ Key Insight

The absence of an audit is a strong negative signal, and the presence of one is a weak positive that requires reading.

✕ Common Misconceptions

Treating an auditor's logo as due diligence. Verify the report exists, is recent, and matches the deployed contract address.

Detailed Explanation

Auditors read the code, model attacks and publish findings by severity, along with whether each was fixed. An audit reduces risk; it does not eliminate it. Audited protocols are exploited regularly, often through logic the audit was never scoped to cover.

In Practice

“A project advertises an audit. The report covers a version from eight months ago and lists two unresolved high-severity findings.”

Dig Deeper

Wallet

Software or hardware that stores your private keys and lets you sign transactions.

Token

An asset created by a smart contract on an existing blockchain rather than being that blockchain's native currency.

Blockchain

A shared, append-only record of transactions maintained by many independent computers at once.

Transaction

A blockchain transaction is a signed or authorized instruction that changes blockchain state or transfers value when accepted by the network.