Audited Contract

Definition ∞ An audited contract is a smart contract that has undergone a professional security review to identify vulnerabilities. This review process involves a thorough examination of the contract’s code, logic, and potential interactions with other protocols by independent security experts. The goal is to detect flaws, backdoors, or inefficiencies that could lead to financial losses or system instability. A successful audit provides a level of assurance regarding the contract’s integrity and adherence to its stated functions.
Context ∞ Audited contracts are frequently cited in crypto news as a measure of a project’s legitimacy and security, especially within the DeFi sector. The ongoing debate concerns the effectiveness of audits, as even audited contracts can experience exploits due to novel attack vectors or incomplete scope. Future developments aim to integrate continuous auditing, formal verification methods, and bug bounty programs to enhance the security posture of smart contracts beyond initial reviews.