Smart Contract Security Improvement: Study Guide

Smart Contract Security Improvement: Study Guide

Glossary

Term DefinitionsSmart contractCode that runs in a blockchain consensus network to complete business logic specified by the user. BlockchainA series of data blocks with a sequential relationship, forming a chain structure.NodesA network component that maintains the blockchain and verifies data before storing it in a block.TransactionAny communication between users or between users and financial entities, such as the purchase or sale of goods or services.Transaction Ordering Dependency (TOD)The order in which transactions are executed in a blockchain affects the final outcome of a smart contract.Guard Conditions added to transactions to avoid unexpected results due to TOD. Also known as execution conditions.The world state reflects the latest state of all transactions that have been executed on the blockchain.Execution ExceptionOccurs when an error occurs during execution or when a specific condition is met (such as execution timeout).Short Answer Questions

Please answer the following questions in 2-3 sentences.

What are smart contracts and how do they run on a blockchain?

Explain the transaction ordering dependency (TOD) problem and how it affects the security of smart contracts.

What are the main mechanisms described for improving the security of smart contracts?

What role do guard conditions play in smart contract transactions?

Describe two different scenarios that illustrate how transactions are executed based on guard conditions.

What are the two existing approaches mentioned to solve the TOD problem and what are their limitations?

What are the advantages of the proposed solution compared to existing approaches?

Explain the role of the world state in smart contract execution.

What is an execution exception and how is it handled in the proposed solution?

How does the proposed solution ensure backward compatibility?

Answer

Smart contracts are programs stored on the blockchain that are automatically executed when predefined conditions are met. They run on nodes in the blockchain network, ensuring transparency and security.

Transaction ordering dependency (TOD) refers to the order in which transactions are executed in the blockchain that can affect the final outcome of the smart contract. This dependency poses a security risk because malicious users can exploit it to gain unfair benefits, such as raising prices without the buyer's knowledge.

A transaction execution mechanism based on guard conditions is proposed to improve the security of smart contracts.

Guard conditions act as safeguards for transactions, ensuring that transactions are executed only when certain conditions are met. This helps prevent unexpected results due to TOD.

Scenario 1: If the guard condition is met (for example, the price of the commodity matches the price defined in the transaction), the transaction is executed and the state of the smart contract is updated. Scenario 2: If the protection condition is not met, the transaction is terminated and the state of the smart contract remains unchanged.

The two existing methods are batch auction and pre-submission. Batch auction sacrifices the execution efficiency of a single transaction, while pre-submission requires both parties to reach a consensus on the result before execution, which reduces the execution efficiency.

Compared with existing methods, the proposed solution avoids the ordering dependency between transactions by setting execution conditions for each transaction, thereby improving security without affecting the execution efficiency of a single transaction.

The world state represents the latest state of all executed transactions on the blockchain. Smart contracts are executed according to the current world state, ensuring that all transactions are based on the latest information.

Execution exceptions refer to errors that occur during the execution of smart contracts, such as execution timeouts or insufficient resources. In the solution proposed by the patent, if an execution exception occurs, the transaction is terminated and the world state is restored to the previous state.

Backward compatibility is ensured by allowing existing smart contracts to set protection conditions to "true" by default.