The Importance of Formal Verification in Smart Contracts

Although smart contracts have enabled easier transactions, they have become prone to hacks and errors due to vulnerabilities in the smart contract development process. These attacks have affected companies and result in a substantial amount of money to be lost in the process.



Cryptocurrency hacks commonly take place when an error in critical functions are exploited that can lead to an array of problems ranging from locked funds to complete annihilation of contract.
The prevalence of these exploits has doubled over the years according to a recent report which also identified more than 34,000 trace vulnerabilities out of almost 1 million analysed.

It becomes pertinent, then, to develop corrective measures for reducing the instances of smart contract hacks.Some developments include erosion of smart contract language that reduces logical ambiguity which may hinder the process of clarity in contract languages. Other programs initiated to focus on early warning systems to create alerts when critical contract functions are used to steal funds from exchanges.

This is where the use of formal verification sets in. Formal verification is a series of processes that ensure correctness using a set of abstract mathematical models. These mathematical models are then used to verify if a smart contract program matches with the agreed-upon specification.


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