Web3 security is one of the prominent concerns for developers, businesses, and users. The value associated with Web3 solutions is one of the foremost reasons to look for effective ways to safeguard Web3 apps. As a matter of fact, innovative measures such as Web3 bug bounty programs have served crucial value benefits in strengthening Web3 security. 

The traditional meaning of a bounty describes a reward for individuals who report information about criminals or help in catching them. In the case of Web3, bug bounties refer to the programs which offer rewards to developers for identifying bugs. Bug bounty programs have emerged as a favorable choice for different blockchain projects such as DeFi solutions and DAOs. The following post offers a detailed introduction to Web3 bug bounties and how they work.

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Definition of Web3 Bounties

The first thing on your mind about Web3 bounty programs would be the definition of bounties in Web3. Answers to “What is a Web3 bounty?” define them as reward programs of Web3 projects for ethical hackers involved in the identification of security issues with Web3 apps. The basic goal of Web3 bounty programs revolves around the identification and resolution of vulnerabilities before hackers exploit them. 

Bug bounty Web3 programs are the best fit for smart contracts and dApps. Both dApps and smart contracts account for a major share of Web3 apps. Most of the new Web3 solutions, such as DeFi apps and NFTs, use smart contracts and could feature vulnerabilities. Considering the value associated with Web3 solutions, it is important to learn why bounty programs are essential in Web3.

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Significance of Web3 Bounties

The next important highlight in the basic guide to Web3 bounty would refer to a detailed impression of their importance. Reviews of different web bug bounty write-ups can help you identify the specific reasons for emphasizing Web3 bounty programs. The primary function of Web3 bounty programs is to help in the effective identification and timely fixing of issues in Web3 apps before they cause any problems. In addition, the growing adoption of smart contracts and decentralized applications can broaden the attack surface. Therefore, a Web3 bug bounty platform can provide a viable line of defense against potential attacks along with safeguards for user funds.

The capability of Web3 bounty programs to offer security with Web3 apps can improve the trust of users in the Web3 ecosystem. Web3 bounty programs distribute the rewards in public, and the concerned project can showcase its commitment to security. In addition, bug bounty Web3 programs can also help Web3 projects showcase proof of their collaboration with the ethical hacking community. 

The advantages of Web3 bounty programs are also applicable to the developers and ethical hackers involved in the programs. Ethical hackers can earn rewards for their efforts in improving the security of Web3 apps. In addition, bug bounties can help in building a reputation as a professional security expert in the domain of Web3.

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Working of Web3 Bounty Programs

Learners interested in Web3 bounty programs must also have curiosity regarding the working of the bounty programs. The common process for working of Web3 bounty programs involves three steps, such as security assessment, vulnerability reporting, and reward allocation. Security assessment in Web3 bounties focuses on the evaluation of the potential vulnerabilities in the Web3 project. The security assessment process involves a comprehensive evaluation of the project’s code and infrastructure alongside the user interface. 

After the identification of the potential vulnerabilities in Web3 projects, bounty programs would focus on reporting. Ethical hackers have to report the identified vulnerabilities to the Web3 project developers or founders who have created the bounty program. The Web3 bug bounty report must feature a detailed outline of the vulnerabilities and the possible ways in which hackers could exploit them. Upon successful confirmation and resolution of the issues, ethical hackers can receive a bounty. 

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Variations of Web Bug Bounties

It is important to remember that the rewards in Web3 bounty programs would depend on the severity of the problem. The rewards account for the potential impact of a vulnerability as well as the types of parameters tested in bounty programs. Some Web3 bug bounty write-ups reflect on the differences in bug bounty programs and how they feature different rewards. The common bug bounties in Web3 are announced before the release of the project. Researchers, developers, and ethical hackers search for bugs and receive rewards for finding critical bugs. 

On the other hand, Web3 developer bounty programs for smart contracts might focus specifically on the review of smart contract code for the identification of flaws. Furthermore, Web3 bounty programs also focus on testing vulnerabilities in new features with the participation of blockchain developers, architects, and UX designers. On top of it, bug bounty programs in Web3 also seek researchers to discover vulnerabilities in Github repositories and submit relevant solutions. 

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Vulnerabilities in Web3 Bounty Programs

The necessity of a Web3 bounty program is one of the critical doubts for Web3 developers and project founders. Are Web3 bounties really necessary for Web3 projects? Some arguments also point to how Web3 is inherently secure with cryptography and smart contracts. Interestingly, you would be surprised to find that smart contracts and cryptography can also showcase vulnerabilities. For example, smart contracts are lines of code that define the agreement between two or multiple parties. However, a small vulnerability in the smart contract code can expose the complete Web3 project to risks. 

Similarly, cryptographic vulnerabilities such as lack of security in encryption strategies and setbacks in key generation can affect Web3 security. The answers to “What is a Web3 bounty?” would also point to problems with network vulnerabilities. Web3 projects rely on efficient and seamless transactions through a distributed network of nodes for facilitating transaction validation and consensus mechanisms. Some of the notable attacks which affect the functioning of blockchain networks include denial of service attacks, network partitioning, or node takeover.

The detailed review of vulnerabilities in Web3 projects can help in identifying how bounties will be an integral part of the future of Web3. Before you choose a Web3 bug bounty platform, it is important to familiarize yourself with the important vulnerabilities in Web3 projects. 

  • The prominent vulnerabilities with Web3 projects include vulnerabilities related to smart contract logic, such as integer overflow and bad arithmetic. 
  • Reentrancy attacks are also another common vulnerability in the Web3 landscape, popularized by the DAO hack. 
  • Other potential sources of vulnerability in Web3 projects include bad randomness, blockchain bridges, oracle manipulation, and flash loan attacks. 
  • Function default visibility, malleable signatures, and unprotected Ethereum withdrawal also qualify as prominent vulnerabilities in Web3 security.

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How Can You Choose Bug Bounty Platforms?

The next important concern in Web3 bounty would refer to the selection of bug bounty platforms. Some of the notable bug bounty Web3 platforms include HackenProof, HackerOne, ImmuneFi, Synack, and Bugcrowd. The platforms offer the facility for posting Web3 bounty projects to identify specific bugs or for a complete evaluation of the project. The essential criteria in the selection of a Web3 bounty program across four different categories can help you find bounty platforms. Web3 projects can compare bug bounty platforms on the grounds of the following criteria such as, 

  • Industry-asset combination
  • Criteria for competition
  • Differences in the workflow
  • Experience and compliance

Interestingly, each criterion for the selection of a Web3 bug bounty platform includes other important factors for making an informed decision. The industry-asset combination is an essential highlight for verifying whether the bug bounty platform is capable of working with the digital asset types in a specific Web3 project. On the other hand, the critical criteria for competition would include pricing, researcher count, triage team, and review score. 

You have to pay special attention to the pricing and availability of researchers and triage teams for choosing a bug bounty platform. How much reward budget do you have in mind for a Web3 bounty program? Does the platform offer the services of hackers and researchers with relevant expertise in your Web3 project type? The answers to these questions help in identifying the suitable pointers to choose a bug bounty platform for your Web3 project.

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Existing Challenges in Testing Web3 Projects

The primary challenge of testing Web3 projects emerges from the fact that they are open-source in nature. Open-source software testing involves two distinct risks, such as decision-making challenges and concerns regarding integrations. The decision-making process in Web3 bounties can differ according to the needs of the project. However, the decision-making privileges in Web3 projects are allocated to the community, thereby creating problems with bug bounty programs. Who are the bounty hunters supposed to report to? 

Apart from such issues, the problems with Web3 bug bounty programs also point to the additional time and effort required for marketing the bounty program. In addition, it is important to provide a clear definition of the scope of the bug bounty program to avoid redundant costs. The responsibilities of bounty hunters in Web3 also become difficult due to the necessity for replicating conditions of the production environment in the staging phase. On the other hand, pieces in Web3 projects fit with each other like Lego bricks, thereby creating interdependency. 

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Future of Web3 Bug Bounty Programs

The discussions around the future of Web3 bounty programs draw attention to the advantages of bounty programs. One of the promising highlights of Web3 bounties is the advantage of open-source testing in broadening the capabilities for identifying bugs in Web3 projects. Bounty programs help bring more workforce and specialists on board to take care of the security of a Web3 project. Bug bounties also help in accessing a broader range of perspectives on Web3 applications and required skill sets. 

Another promising aspect in discussions about Web3 bounty programs refers to the reward for bounties. What is the ideal price to pay an ethical hacker, developer, or Web3 professional for identifying a vulnerability? Recently, the Polygon network had to pay $2 million as a bounty to a white hat hacker for identifying an exploit. 

From the outset, the $2 million might appear as a massive amount to pay for a single exploit. However, it is also important to reflect on the potential of the exploit for causing losses worth over $850 million. In the long run, Web3 bug bounty programs would open up new avenues for security professionals and developers to improve their testing skills.

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The outline of important issues leading to Web3 bug identification programs and their advantages show a balanced perspective on bug bounties on Web3. One of the vital aspects of Web3 bug bounties is the importance of encouraging an open-source testing approach. Rather than relying on dedicated in-house professionals, Web3 projects can use the Web3 bug bounty platform of their choice. 

Such platforms offer access to the expertise of thousands of researchers and ethical hackers. However, it is important to choose a bug bounty platform in Web3 with adequate precautions. Learn more about Web3 fundamentals and the best approaches for addressing security in blockchain-based solutions. 

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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!