Definition
A security review of a smart contract's code by professional security researchers to identify vulnerabilities, bugs, or exploitable logic errors before deployment.
Why It Matters
Unaudited smart contracts are a primary cause of DeFi hacks and fund losses. Checking if a protocol has been audited by reputable firms is one of the most basic safety checks before investing.
Example
Aave, Uniswap, and Compound have all undergone multiple audits by firms like Trail of Bits and OpenZeppelin. New unknown protocols with no audits carry significantly higher risk.
Related Terms
Smart Contract
DeFi
Rug Pull
Security