What Is the Primary Security Risk Associated with Smart Contracts?
The primary risk is the presence of bugs or vulnerabilities in the underlying code. Since smart contracts manage valuable assets and are immutable once deployed, any flaw can be exploited by attackers, leading to significant financial losses.
This risk is amplified by the complexity of contract logic and the difficulty of formal verification.
Glossar
Smart Contracts
Function ⎊ Smart contracts are self-executing agreements with the terms of the agreement directly written into lines of code, residing on a decentralized ledger.
Contract Logic
Design ⎊ The architecture of the underlying code dictates the long-term behavior and fairness of any financial agreement, requiring careful consideration of edge cases and potential externalities.