Date of Publication :31st May 2023

Abstract: The rapid adoption of digital assets has reshaped the financial landscape, introducing the need for trading and settlement transactions. However, this evolution has also exposed vulnerabilities that compromise the integrity and security of digital asset centralized exchanges (CEXs). This thesis introduces a comprehensive framework leveraging formal verification, penetration testing, and security auditing to enhance the security of smart contracts within CEXs. We address specific security requirements including user authentication, transaction integrity, data confidentiality, funds protection, smart contract security, and market manipulation prevention. Through the application of these methodologies and quantifiable assessments, we achieve a substantial reduction in vulnerabilities. Moreover, our results are mapped to OWASP's top 10 security risks for smart contracts, providing concrete evidence of the practical implications. This research presents a holistic approach to smart contract security, fostering user trust and establishing a robust foundation for future advancements in the digital asset industry.

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