What Is the Role of a Security Audit in Mitigating Smart Contract Risk for Investors?

A security audit is a professional review of a smart contract's code to identify vulnerabilities, logic flaws, and potential exploits. For investors, a successful, reputable audit provides a critical layer of due diligence, mitigating the risk of catastrophic loss from an exploit.

While audits do not guarantee complete security, they significantly reduce the likelihood of known attack vectors, which lowers the risk premium and supports a higher valuation.