Securing a private centralized system is relatively straightforward compared to safeguarding the public network that is Web3. Smart contracts depend on predefined rules. Errors or flaws in the code can lead to unexpected behavior or vulnerabilities like reentrancy and double-spending. Web3 must maintain a higher level of security to ensure our safety. As a community of builders, we should collaborate to keep our community safe from would-be hacks. Web3 security is still in its infancy, but we are developing multiple strategies to address incoming security concerns like auditing, auditing competitions, and smart contract bug bounty. Today, we will dive into smart contract bug bounty and its inner workings. 

Did you know that there are people called bug bounty hunters who help identify security flaws in smart contracts? These hunters receive financial rewards for finding and reporting the bugs. Web3 bug bounties encourage smart contract security researchers and the wider expert community to comb through smart contacts to identify and report bugs successfully before malicious actors exploit them. Projects should take Web3 security seriously before and especially after the launch; this is where Web3 bounties play a major role. Performing a comprehensive web3 bug bounty program once a project is live on the blockchain enhances the security of Web3 platforms by identifying vulnerabilities devs may have missed. Bug Bounties also acknowledges the impossibility of a single team testing every aspect thoroughly. This approach helps minimize the risks associated with finance, reputation, and legal issues.

Hallmarks of Effective Bug Bounty Program

Allowing the ethical hacking community to review your codebase for security vulnerabilities is a best practice that can highlight a project's cooperation with the community. However, bug bounties entail more than simply allowing security researchers to examine the code—as many bug hunters have discovered throughout their careers. The program host must be willing to communicate effectively and compensate bug hunters for identified issues.

Scope 

Before testing every contract in the wild, web3 bug bounty hunters should focus on a project's scope. Scope defines precise parameters and offers enticing rewards to incentivize engagement within the program. Clarity regarding the scope is crucial, encompassing specific platforms, protocols, and types of vulnerabilities that might or might not be covered. Competitive compensation for identifying high-risk vulnerabilities is vital to attract skilled security researchers and ensure the initiative's effectiveness.

Communication and reporting

If we want to make our bug bounty program a success, we need response teams who are quick and efficient in reviewing and resolving reported vulnerabilities. Working alongside the bounty hunters, they are the real heroes who help keep our systems secure and prevent potential threats. Projects should establish clear and responsive communication channels to facilitate researchers in reporting vulnerabilities easily, simplifying reporting, and providing updates that foster transparency for security researchers post-reporting.

Real-Life Web3 Bug Bounty 

Aurora, a solution that helps bridge and scale Ethereum (ETH), rewarded an ethical security hacker named pwning.eth with a $6 million bug bounty for identifying a critical vulnerability in the Aurora Engine. The vulnerability discovered by the hacker put user funds worth $200 million at risk. In collaboration with AuditOne, Aurora created a Bug Bounty program offering up to $1 million in reward for finding bugs within its scope.

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Related Article: Exploring Web3 Bug Bounty Programs

Reporting a Bug Bounty

Assessment

Bug bounty hunters assess smart contracts by thoroughly reviewing, testing, and simulating real-world threats and scenarios. They aim to prevent potential compromises of the system's integrity and safeguard the security and trustworthiness of smart contract implementations.

Reporting

White-hat hackers document and report vulnerabilities, including replication steps, possible solutions, and impact. This report helps the project team fix issues faster, fosters communication, and promotes transparency. Thorough documentation can help spread knowledge in the blockchain community and prevent similar smart contract vulnerabilities in the future.

Rewards

Bug bounty programs incentivize ethical hackers to report vulnerabilities to the appropriate authorities. The reward amount varies depending on the severity and impact of the bug. However, the industry standard is around 10% of funds at risk. Ultimately, incentivizing good behavior improves the security of blockchain applications and smart contracts.

Bounty Programs in AuditOne

AuditOne currently hosts several bug bounty programs: Aurora, Humans.ai, IOTA Heroes, Rethink Finance, and Zarban. AuditOne believes our responsibilities extend beyond preparing audit reports. We are committed to ensuring the long-term protection of the projects we audit. To achieve this, we allocated a portion of our revenue to create a bug bounty program listed on our website and shared it with our community of auditors. We also give projects the option to match our stake in the bounty, which shows how committed we are to protecting the projects we audit. We usually allocate at least 2k for small projects and more for larger ones. 

Conclusion 

Bug bounties are crucial for ensuring blockchain security in the dynamic and ever-evolving world of Web3. They include a scope, assessments, rewards, and reporting policy. Cybersecurity must be considered at every level of project development, from initial audits to bug bounties at the final stage. At AuditOne, we are committed to strengthening security and fostering safety for Web3 projects. Our bug bounty programs are designed with project safety in mind, ensuring robust protection against potential vulnerabilities. Host your Bug Bounty or talk to us now!