For the DeFi community
This week, Ethereum scaling solution Optimism paid a $ 2 million bug bounty for finding a bug that allowed users to double the cost and generate an unlimited amount of tokens without assistance. This exploit has been patched and bug bounties have proven to be one of the most valuable resources for early stage protocols where security is paramount.
Last week we discovered (and reported) a critical bug (fully patched). @optimismPBC (Ethereum’s “Layer 2 Scaling Solution”) This allowed the attacker to print any amount of tokens, earning a $ 2,000,042 bounty. https://t.co/J6KOlU8aSW
— Jay Freeman (saurik) (@ saurik) February 10, 2022
Competing scaling solution Polygon has announced that it will personally sell $ 450 million of MATIC tokens to investors such as Sequoia Capital India, Softbank and Galaxy Digital. The funds will be used to help Ethereum maintain its status as the leading smart contract execution blockchain and build a set of services for Polygon to become “AWS on Web3”.
#polygon Now it is supported by the best. This truly reflects the common vision of many people to make web3 a billions of choices.#WAGMI? https: //t.co/LgG1OSRvEz
— Polygon | $ MATIC ? (@ 0xPolygon) February 7, 2022
Ssv.network (Secret-shared-validator) has announced a $ 10 million round of funding led by the Digital Currency Group and Coinbase. Ssv aims to provide nodes with a decentralized staking solution to support the Ethereum Consensus Layer (formerly Eth 2.0) and will use this funding for collaboration to developers and network participants. Fund the grant.
..@ssv_networkEthereum’s Consensus Layer’s decentralized staking protocol has raised $ 10 million to expand the platform prior to the integration of the blockchain into Proof of Stakes. https://t.co/slXEFxP6wE
— Cryptocurrency briefing (@Crypto_Briefing) February 8, 2022
And MakerDAO has launched its own $ 10 million bug bounty program via the leading crypto security company Immunifi. You do not need the KYC to report and pay for bugs. The program pays up to $ 10 million for critical security bugs found in the protocol’s live smart contracts.
MakerDAO and Immunefi Security Core Units Announce Biggest Bug Bounty on DeFi!@ImmunefiSecCU : Security core unit @MakerDAOLaunched $ 10 Million Bug Bounty Program at Immunefi!
Immunefy (@immunefi): The major bug bounty platform for blockchain. https://t.co/BQhNze72JN
— Immunefi (@immunefi) February 10, 2022
DeFi hacking is still a common occurrence and is not a big surprise to the less than five year industry built using entirely new infrastructure. However, the headline rarely verifies the concept of DeFi as a “financial future”, and protocols affected by large exploits have such losses as business termination, and in some cases personal responsibility.
Every team has the resources to offer bug bounty programs of the scale offered by major DeFi players such as Polygon (which paid its own $ 2 million bug bounty just a few months ago) and MakerDAO. Not. However, these protocols are less likely to be targeted because of the low potential reward for a successful attack.
However, the riskiest turning point can become apparent when the time for good ideas arrives and applications move from a small TVL niche to the flavor of a rapidly rising TVL day. These teams may already be overkill as demand outweighs talent and other resources. Beyond capital, potential profits from exploits grow rapidly. In these situations, it’s best to follow the Blue Chip Player as soon as possible when setting up a bug bounty program, even if your rewards don’t rise to $ 10 million. It takes years to generate reliability and seconds to destroy. It’s not shameful to encourage the developer community to check your work.
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Alex is a Circle content writer with experience at tech startups, Fortune 500 companies, and a freelance writer and analyst. His interests include cutting-edge technologies such as blockchain, energy, supply chain, transportation and urban life, and he has been in the crypto community since 2014.