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Executive Overview

Smart contracts are no longer experimental code running on niche blockchains. In 2026, they are financial infrastructure—governing payments, identity, supply chains, DAOs, and cross-chain systems worth billions.

Yet most smart contract breaches do not stem from novel cryptographic failures. They result from predictable design flaws, unsafe assumptions, and incomplete threat modeling.

This checklist defines a defensive, auditor-first framework for reviewing smart contracts in 2026—focused on preventing real-world exploits, not passing superficial audits.

This document is educational and defensive, intended for secure development and risk reduction.

How to Use This Checklist

This is not a “run once and forget” list.

Use it:

• During design review
• Before deployment
• After upgrades
• After dependency changes
• During incident response

A contract that passed audit last year may already be unsafe today.

1. Threat Model & Trust Assumptions 

Before reviewing code, confirm the security model.

 Audit Questions

• What assets are protected (funds, governance, identity)?
• Who can call privileged functions?
• What assumptions are made about:
  • Oracles
  • Admins
  • Validators
  • Cross-chain relayers
• What happens if a trusted party fails or is compromised?

 Red Flags

• “Admin will always behave correctly”
• “Oracle data is always accurate”
• “Users won’t call functions in unexpected order”

Most catastrophic failures start with invalid assumptions, not bugs.

2. Access Control & Privilege Boundaries

Access control errors remain the #1 cause of smart contract losses.

 Verify

• Role-based access is explicit and minimal
• No hidden or inherited privileges
• Admin functions are isolated
• Emergency functions are restricted and logged
• Ownership transfer logic is safe and reversible

 Red Flags

• Single EOA as admin
• Hardcoded privileged addresses
• Missing onlyOwner / role checks
• Admin powers not documented

If access control is wrong, nothing else matters.

3. Upgradeability & Proxy Safety

Upgradeable contracts introduce long-term risk, not just deployment risk.

 Verify

• Proxy pattern is intentional and documented
• Storage layout is preserved across upgrades
• Initialization functions are protected
• Upgrade authority is tightly controlled
• Rollback is possible if upgrade fails

 Red Flags

• Unprotected initializer
• Storage collisions
• Upgrade logic callable by non-admins
• No versioning strategy

Most proxy exploits happen months after deployment, not on day one.

4. Business Logic & State Integrity

Smart contracts fail when logic doesn’t match intent.

 Verify

• State transitions are valid in all orders
• Critical invariants are enforced
• Edge cases are handled (zero values, max values)
• Paused states actually block dangerous actions
• Partial execution cannot corrupt state

 Red Flags

• Assumed call order
• Silent state changes
• Complex branching without tests
• “This should never happen” comments

Attackers specialize in making “never” happen.

5. External Calls & Reentrancy

External calls remain one of the most abused mechanisms.

 Verify

• Checks-effects-interactions pattern
• Reentrancy guards where appropriate
• External calls minimized and isolated
• Failure handling is explicit
• No reliance on fallback behavior

 Red Flags

• State changes after external calls
• Untrusted external contract interactions
• Complex logic inside callbacks

Reentrancy is not just about ETH—it’s about control flow abuse.

6. Arithmetic, Precision & Value Handling

Silent math errors still cause massive losses.

Verify

• Safe math is enforced (or compiler protections understood)
• Decimal precision is consistent
• Rounding behavior is intentional
• Overflow/underflow risks are eliminated
• Fee calculations cannot be manipulated

 Red Flags

• Mixed precision arithmetic
• Assumed token decimals
• Division before multiplication
• “Close enough” rounding logic

Financial code must be exact, not approximate.

7. Oracle & External Data Dependencies

Oracles are attack surfaces, not utilities.

 Verify

• Oracle trust model is documented
• Price feeds are resistant to manipulation
• Update frequency matches usage
• Stale data is detected and rejected
• Fallback behavior is defined

 Red Flags

• Single oracle dependency
• No freshness checks
• On-chain logic assuming off-chain honesty

Most DeFi exploits are oracle exploits in disguise.

8. Gas, DoS & Economic Abuse

Not all attacks steal funds directly.

 Verify

• Loops are bounded
• Gas usage is predictable
• No user-controlled unbounded storage growth
• Griefing attacks are considered
• Economic incentives align with security goals

 Red Flags

• Unbounded arrays
• User-controlled loops
• Functions that can be made prohibitively expensive

Denial-of-service is still a breach.

9. Event Logging & Observability

If you can’t observe it, you can’t respond to it.

 Verify

• Critical actions emit events
• Admin actions are logged
• State changes are traceable
• Logs support forensic analysis

 Red Flags

• Silent critical changes
• Missing admin events
• Over-reliance on off-chain monitoring

Security without visibility is false security.

10. Testing, Monitoring & Incident Readiness

Audit is not the end of security.

 Verify

• Unit tests cover failure paths
• Fuzzing includes edge cases
• Invariants are tested
• Monitoring hooks exist
• Emergency response plan is defined

 Red Flags

• “Audit passed, we’re done”
• No plan for pause, rollback, or migration
• No post-deployment monitoring

Smart contract security is continuous, not static.

Final Authority Takeaway

In 2026, smart contract security failures are rarely surprising.

They are:

• Known
• Repeated
• Preventable

Teams that treat audits as a checkbox will continue to lose funds.
Teams that treat audits as threat modeling exercises will survive.

Security is not about finding bugs.
It is about eliminating dangerous assumptions.

#CyberSecurity #SmartContractSecurity #BlockchainSecurity #Web3Security #SecureDevelopment  
#ThreatModeling #DefensiveSecurity