It was around this time last year that we reported on Immunefi – one of the emerging bug bounty and security services platforms for DeFi – having raised $5.5 million in funding. Given that almost $2 billion has been lost to hacks and scams in crypto so far this year, it would seem this was a pretty low investment.
Immunefi’s Series A Funding: A Significant Milestone
And sure enough, it was. Because Immunefi has now raised $24 million as part of its Series A. The round was led by Framework Ventures. Other investors include Samsung Next, Electric Capital, and Polygon Ventures. That brings its total now raised to $29.5 million.
The Problem of Bug Bounty in Web3
Immunefi connects web3 projects that need their code checked and secured with whitehat hackers who report vulnerabilities and claim monetary rewards. Sometimes these rewards can go as high as $10 million – somewhat unsurprising when so much cryptocurrency can be at stake.
Most tech companies, including Apple and Microsoft, use a similar bug bounty methodology, but the practice was less well employed in web3, in part because hackers can sometimes be far more incentivized to steal the money rather than report the bug, especially when millions of dollars might be on offer.
The Importance of Whitehat Hackers
Launched in December 2020, Immunefi says it has paid out $60 million to whitehat hackers, and claims to have saved more than $25 billion in funds from being hacked. But bug payouts in crypto have to work differently than in Web 2.0.
A $5,000 payout when $100 million in funds might be at stake is a paltry amount. So Immunefi developed a bug bounty standard which scales, to encourage projects to pay rewards for big vulnerabilities at a rate equivalent to 10% of the funds at potential risk.
The Impact of Immunefi’s Bug Bounty Standard
This means some enormous bug bounties – such as the $10 million paid out for a vulnerability discovered in Wormhole, a generic cross-chain messaging protocol, and $6 million for a vulnerability discovered in Aurora, a bridging and scaling solution for Ethereum. This contrasts with the largest conventional bug bounty offered by Apple for $2 million.
CEO’s Statement on Immunefi’s Success
CEO and founder Mitchell Amador said in a statement: ‘Open code and directly monetizable exploits have made Web3 the most adversarial software development space in the world. By shifting incentives towards whitehats, Immunefi has already saved billions of dollars of user funds.
Projects across crypto are rapidly realizing that it’s better to use Immunefi than publicly begging hackers to return funds or pay a ransom. We’re using this raise to scale our team to meet this massive challenge.’
Competition in the Bug Bounty Space
Immunefi does have competitors, however; HackerOne switched from Web 2.0 to web3, and Safeheron recently raised $7 million to make private keys safer.
The Future of Immunefi
With its latest funding round, Immunefi is poised to become a leading player in the bug bounty space for DeFi projects. As the cryptocurrency market continues to grow, the need for robust security measures will only increase. With Immunefi’s innovative approach to bug bounty and its commitment to protecting user funds, it is well-positioned to meet this growing demand.
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