Who are white hat hackers and why they are vital to DeFi
The DeFi environment seems to be overly optimistic with investors and DeFi users getting excited about protocols that could never work out or can even be risky. DeFi continues to be a vulnerable industry with anonymous teams, open-source code and a pile of money, all at risk. Such a huge amount of capital and immaturity of the industry creates the perfect environment for hackers, but white hat hackers are also out there.
White hat hackers in DeFi
Aurora, an Ethereum Virtual machine built on the NEAR Protocol, paid a $6M bonus to a white hat hacker who had detected a key bug. The hacker found a critical vulnerability in Aurora’s system — if exploited, the project could have lost $200M of funds. It was one of the biggest bounty payouts in DeFi history.
Other examples include crypto bridge, Wormhole, which paid $10M to an ethical security hacker that also discovered a bug. ArmorFi, a DeFi insurance brokerage, paid a bounty of $1.5M in tokens to a white-hat hacker, who discovered a bug that could have seen all the firm’s underwriting funds drained.
Bug bounty programs
Bug bounty programs are incentivising good actors to discover and disclose vulnerabilities in DeFi projects’ smart contracts and apps. For their good work, white hat hackers receive a reward based on the severity of the vulnerability. By offering rewards for being a good actor on a similar scale as for being a bad actor, that scale suddenly encourages the incentives toward white hatting.
All-round security in DeFi
While white hackers help projects to spot bugs and prevent catastrophic exploits before user funds are stolen, so many bad actors are still out there. With this in mind, DeFi projects should make use of all available security tools in place to establish an all-round protection which includes audits, bug bounty programs, monitoring and alert tools. The latter is exactly what we’re developing at Hackless to boost protection against malicious activities.
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