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All You Need to Know About Binance Smart Chain Audits

By gswardman May 31, 2021

As of late, Binance Smart Chain (BSC) has been a buzz topic in the cryptocurrency world. The increase in activity on the platform has been ranging from decentralized money markets, aesthetic NFTs, and token swaps. These activities call for Binance Smart Chain audits.

The rise of Blockchain also means a rise in security concerns, which have led to people losing millions. To mitigate these risks, it is necessary to run third-party Binance Smart Chain audits to provide investors and the community with transparency.

What is Binance Smart Chain?

What is Binance Smart Chain?

Before we get to Binance Smart Chain audits, you need to understand what BSC is. Binance is a centralized cryptocurrency exchange where users trade cryptocurrency. Binance provides a crypto wallet for the users, where they can store all their electronic crypto funds. Binance has a token currency called Binance Coin and has supporting programs that assist traders in making better investment choices.

Binance Chain is a blockchain initiative started and launched in April 2019 by Binance. The initiative allows anyone to exchange, use and issue digital assets on the blockchain—with the native token in the Binance chain being BNB.

Binance Smart Chain is a smart-contract blockchain that runs parallel to Binance Chain. BSC provides a permissionless platform for dApps (decentralized applications) that use liquidity pools instead of buyers and sellers. Binance Chain offers its users a high throughput that targets active traded. It does not provide a programmability department, but BSC changes that.

Binance provided Smart Chain to provide traders with a low-cost and high-speed alternative to the expanding DeFI (Decentralized finance) ecosystem, which had to endure the high transaction fees from Ethereum (ETH). BSC’s transaction fees are much lower, with a money transfer costing 0.001 USD and the transaction costs paid in BNB tokens.

Lending pools, Stablecoin, DEX (decentralized trading) aggregators, tokenized Bitcoin (BTC), and other finance products are DeFi’s growth accelerators. BSC has an impressive five-second block time, EVM compatibility, Proof of Staked Authority (PoSA), and cross-chain asset transfers.

How Binance Smart Chain Works

Using a Proof of Stake consensus algorithm, BSC can achieve three-second block times. It uses Proof of Staked Authority (PoSA) to become validators, and traders can stake BNB. If the trader proposes a valid block, the trader can receive the transaction fees upon validation of approved blocks.

To allow easy asset transfer from each blockchain, Binance Smart Chain offers traders cross-chain compatibility. This compatibility allows users to transfer data between Binance Chain and Binance Smart Chain and create pegger coins or tokens pegged to BSC, including TRX, ETH, BTC, etc.

How Binance Smart Chain Works

As BSC is compatible with EVM, it negotiates with Ethereum’s ecosystem tools and dApps such as Metamask, Truffle, and Remix. In theory, this is attractive to developers—as it makes it less complicated to import their projects from Ethereum.

Traders can easily configure apps like Metamask, a crypto wallet, and a doorway to blockchain apps and work with BSC. Binance Smart Chain uses a BEP20 token standard that works the same as Ethereum’s ERC20 standard. BEP20 token standard is token- friendly and allows any trader to deploy tokens or fungible digital currencies on BSC. You can port digital assets from other chains onto BSC as pegged BEP20 tokens.

Why BSC is so Popular

Binance Smart Chain is popular among crypto traders for features such as:

  • A self-governing blockchain that provides safety and security with chosen validators
  • EVM compatible
  • It has efficient dual chain communication that is well optimized for high-performing dApps
  • It has on-chain governance, with PoSA bringing in community participants and decentralization. BNB—being Binance’s native token—serves as a staking token and the accelerator for smart contract execution.
  • BSC’s five-second block time allows it to offer high-speed transactions that cost very little for participants.
  • Its DEX can list different assets from other chains, suggest new trade pair listings, and create maker-and-taker orders.
  • Interoperability allows you to transfer tokens and assets instantly.

Security Concerns

The number of transactions on BSC exceeds those on Ethereum by 70%, and given its popularity, BSC is a marked target by malicious users. There have been no attacks yet, but the malicious users are still focused on Ethereum. This does not mean that BSC is safe and will never be attacked.

The ecosystem of DSC’s dApp inherits the same weaknesses that have plagued Ethereum DeFi projects all through. These risks include oracle flaws, smart contract flaws, IL (impermanent Loss), etc.

Binance Smart Chain has signed a deal with a top enterprise dealing with blockchain security known as CertiK. The partnership is for helping projects that are building on BSC to use best practices, build trust, and improve the security standards of the whole BSC DeFI ecosystem.

Interested individuals can reach the Binance Smart Chain team on the Binance Chain Developer Telegram Group or the CertiK team on www.certik.io or via bd@certik.org for a free 30-minute consultation.

Audit of a Smart Contract on BSC

There have been enough cases of companies that have gone down due to unaudited codes. This is enough reason for anyone to get a third-party security audit for a smart contract. BSC is also prone to malice as the community having a lot of control which is the same as 51% of attacks caused by miners with network control.

Steps to a BSC Smart Contract Audit

The process of a BSC Smart Contract audit spans four areas of a user’s privacy:

  • Business Logic
  • Defending private crucial architecture security
  • Data maintenance
  • Infrastructure

These areas ensure the stable, secure operation running of the exchange.

The categories of the Smart Contract Security audit process include:

·       Familiarization with the Project

The auditors have to have a session with the development team to understand the underpinning architecture of the smart contract.

·       Automated Analysis

 Automated Analysis - Binance Smart Chains

The audit team uses dynamic analysis tools to perform an automated analysis such as Manticore, Hyperledger, Mithril, etc. The team should identify bugs in the test suite from the get-go.

·       Manual Analysis

The standard software guidelines should be applied during manual analysis—such as code structure, commenting code, naming variables, and avoiding duplicated code.

·       Analysis of Known Vulnerabilities

Some vulnerabilities keep cropping up in the crypto industry, with hundreds of known-use cases. It is only logical for the known vulnerabilities to be tested separately. These known vulnerabilities include gas limit issues, timestamp dependencies, re-entrancy, etc.

·       Initial Audit Report

After these steps, an auditor should write the findings and the recommendations in a report for the client.

·       Code Recheck

After the first audit report, developers make the required fixes and changes to the code and then turn the docs in for the developers to take a final review.

·       Deploy on the Testnet and Mainnet

Before you deploy the smart contract on the mainnet, you first need to test it on the testnet.

·       Final Audit Report

After everything is fixed, the team combines everything into a final report submitted to the client. These steps are not cast in stone and may vary depending on the client’s needs or the audit team. Hackers are always looking for ways to hack into top projects—which makes it imperative that you get a Smart Contract security audit. Once you prepare everything, the client sends the source application/code and the necessary docs to the auditors. To allow the auditors to speed the process up, the auditors get detailed instructions on how the system works. This allows the auditors to work seamlessly without any frustrations.

Important BSC Metrics You Should Know

1.     BSC Yield Farms

BSC Yield Farms

Yield farming—also known as liquidity farming—generates crypto using your existing holdings. Platforms like PancakeSwap, SushiSwap, or UniSwap can help you generate great APY (annual percentage yields) on BSC. As the fees on BSC are low, it's suitable for smaller players to engage in yield-farming and bite off a chunk of the available crops.

The BscScan dashboard displays all available yield-farming opportunities. You get fast access to the latest info on current farms—such as what they are and how they operate on their websites. Farming yield comprises a combination of ending, borrowing, and trading for gain maximization on the tokens traders have secured in different DeFi protocols.

2.     Binance Smart Chain Average Gas Price

As mentioned earlier, BSC has rather low fees. In BSC, 1 gwei (a denomination of ETH) = 10-9 or 0.000000001 BNB. With a gas price averaging 20 gwei, transferring 10 BNB worth approximately 300 USD will only cost $0.01. Sending more will not cost you more than mere cents.

3.     Binance Smart Chain Unique Address Count

Anyone can create more than one address, and with cryptography, addresses cannot run out. Even if they did, it'd be impossible to determine if these addresses belong to one person. The unique address count gives a rough estimate of how fast the network is growing.

1.     BSC Validators

Validators ensure BSC keeps operating. When they stake BNBs, they process the transactions and also confirm new blocks. In return, their earnings are the transaction fees that come from network activity.

What is Binance CeDeFi?

Binance Smart Chain is a decentralized, hybrid system. Despite risks of corruption posed by centralized authorities, Binance die-hards are also CeDeFI (centralized, decentralized finance) fans. Binance CeDeFi started with the BSC—which is compatible with ETH’s blockchain. It also makes an ideal platform for dApp developments in Gaming, NFT, and DeFi. For the investors who choose to overlook the centralization, they get smaller fees and shorter block times compared to ETH (Ethereum)

Conclusion

Binance Smart Chain is growing fast, and as long as Ethereum keeps up with its high fees, BSC will keep growing. On the other hand, ETH’s high gas fees suggest high demand, but it has more negatives than positives. In the next few years, we might be looking at a rapid BSC expansion—even more than we see now.