Smart Contract Reading Guide

Smart Contract Reading Guide

You don't need to be a Solidity developer to read smart contracts. This guide teaches you to understand what contracts do by reading their code on block explorers.

Finding Contract Code

Block Explorers

Steps to Read a Contract

1. Go to the explorer → Enter contract address
2. Click "Contract" tab
3. Look for the green checkmark ("Contract Source Code Verified")
4. If not verified → RED FLAG — don't interact with unverified contracts

Understanding Contract Structure

Solidity 101 for Readers

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

// Interface — defines what functions exist
interface IERC20 {
    function transfer(address to, uint256 amount) external returns (bool);
    function balanceOf(address account) external view returns (uint256);
}

// Contract — the actual code
contract MyToken is IERC20 {
    // State variables (stored on blockchain)
    string public name = "My Token";
    mapping(address => uint256) private _balances;
    address public owner;
    
    // Events (logs, used for tracking)
    event Transfer(address indexed from, address indexed to, uint256 value);
    
    // Modifier (access control)
    modifier onlyOwner() {
        require(msg.sender == owner, "Not owner");
        _;
    }
    
    // View function (read-only, free to call)
    function balanceOf(address account) external view returns (uint256) {
        return _balances[account];
    }
    
    // State-changing function (costs gas)
    function transfer(address to, uint256 amount) external returns (bool) {
        _balances[msg.sender] -= amount;
        _balances[to] += amount;
        emit Transfer(msg.sender, to, amount);
        return true;
    }
    
    // Owner-only function (⚠️ check these carefully)
    function mint(address to, uint256 amount) external onlyOwner {
        _balances[to] += amount;
    }
}

Key Solidity Concepts

Reading on Etherscan

"Read Contract" Tab

Free queries — anyone can call these:

"Write Contract" Tab

Requires wallet connection and gas:

Decoding Transactions

Transaction Overview

On any transaction page:

Reading Input Data

Raw input data looks like:

0xa9059cbb000000000000000000000000abcdef...00000000000000000000000000000000000000000000000000000002540be400

Decoded (Etherscan does this automatically for verified contracts):

Function: transfer(address, uint256)
  to: 0xabcdef...
  amount: 10000000000 (10,000 USDC with 6 decimals)

Event Logs

Every transaction emits events (in the "Logs" tab):

Transfer(
  from: 0x1234...,
  to: 0x5678...,
  value: 1000000000000000000  (1 ETH in wei)
)

Common DeFi Contract Patterns

ERC-20 Token

Lending Protocol (Aave-style)

DEX (Uniswap-style)

Stablecoin (like USDs)

ABI (Application Binary Interface)

The ABI defines how to interact with a contract programmatically:

[
  {
    "name": "balanceOf",
    "type": "function",
    "inputs": [{ "name": "account", "type": "address" }],
    "outputs": [{ "name": "", "type": "uint256" }],
    "stateMutability": "view"
  }
]

Where to get ABIs:

1. Etherscan → Contract tab → "Contract ABI" section
2. Protocol documentation
3. GitHub repositories

Proxy Contracts

Many DeFi protocols use proxies (upgradeable contracts):

User → Proxy Contract → Implementation Contract
       (fixed address)   (logic, can be upgraded)

On Etherscan: Look for "Read as Proxy" / "Write as Proxy" tabs. If you see a proxy, click through to read the implementation contract.

Security Checklist for Contract Review

Agent Tips

1. Verified contract is non-negotiable — never recommend interacting with unverified contracts
2. "Read as Proxy" — always check for proxy implementation for the real logic
3. Owner functions are key — what the owner can do defines the trust assumptions
4. View functions are free — encourage users to read contract state before transacting
5. Etherscan does the heavy lifting — auto-decodes transactions, ABI, and events
6. Sperax contracts are verified — USDs, SPA, and Farms contracts on Arbiscan are fully verified and audited

Links

• Etherscan: https://etherscan.io
• Arbiscan: https://arbiscan.io
• Solidity Docs: https://docs.soliditylang.org
• OpenZeppelin (standard contracts): https://openzeppelin.com/contracts
• Sperax Contracts: https://docs.chat.sperax.io