Immunefi, a blockchain security platform, has unveiled an innovative on-chain bug bounty system known as “Vaults.” This system provides a secure means for Web3 developers to hold funds in an on-chain address and utilize them to reward white hat hackers who uncover vulnerabilities. In the realm of software development, bug bounties are incentives offered to hackers who identify and report software vulnerabilities or exploits, aiding in the early detection of potential threats before malicious actors can exploit them.
The new Vaults system by Immunefi facilitates the deposit of bug bounty funds into a Safe multisig smart contract (previously referred to as a “Gnosis Safe”). This approach offers transparency to white hat hackers, confirming the availability of funds for rewards. When a legitimate bug report is submitted and verified by the project, the funds can be released to the bug reporter’s wallet.
During the launch of Vaults, Ethereum infrastructure provider SSV notably deposited $1 million to support bug bounties for its software. Decentralized exchange Ref Finance, operating on the Near network, also embraced this system. Eridian, a contributor to SSV DAO, emphasized that on-chain bug bounties enhance security for the DAO’s validator services. Eridian highlighted that the Vaults System builds trust with researchers and streamlines the payment process, ultimately bolstering security efforts.
Amidst a notable rise in blockchain hacks during the second quarter of 2023, as reported by Immunefi in July, the demand for enhanced security measures in the blockchain space is evident. The data revealed a 63% increase in blockchain hacks compared to the same period the previous year, with the majority of incidents occurring within decentralized finance (DeFi) platforms. DeFi platforms incurred losses totaling $228 million across 79 hacking incidents. Immunefi’s founder anticipates that as the DeFi ecosystem continues to expand, large-scale hacks may become more prevalent.
In light of these challenges, building trust within the blockchain community becomes crucial to mitigate future losses. As of December 2022, Immunefi had facilitated $66 million in bug bounty payouts since the platform’s inception. An illustrative example is LayerZero, which launched a $15 million bug bounty program through Immunefi on May 17. Immunefi’s introduction of the Vaults bug bounty system represents a significant step towards enhancing security within the blockchain ecosystem. By offering a transparent and secure mechanism for rewarding white hat hackers, it aims to reduce vulnerabilities and potential exploits, ultimately fostering greater trust within the blockchain community. As the blockchain space continues to evolve, initiatives like this are increasingly vital to safeguard digital assets and uphold the integrity of decentralized platforms.
