Cointelegraph has recently announced that Hats Finance, a platform focused on community participation in on-chain audit competitions and bug bounties, has joined their Accelerator program.
Smart contracts, which are small programs that automate and execute on-chain agreements, are essential for decentralized finance (DeFi). Regular audits are crucial to identify and eliminate vulnerabilities to prevent attacks and ensure smooth operation of decentralized applications (DApps) and Web3 as a whole.
Statistics from the first quarter of 2024 reveal that only 44% of Web3 projects underwent smart contract audits. This lack of audits poses significant security risks, as many hacked projects did not have proper audits. With smart contracts becoming more complex due to new use cases like real-world assets (RWAs) and modular wallets, the importance of effective audits has never been higher.
Traditional audits are not well-suited for the fast-paced and diverse Web3 environment. They often involve a limited number of auditors, leading to the risk of overlooking vulnerabilities. Additionally, the audit process can be time-consuming and costly, with fees ranging from $5,000 to $15,000 for an average audit. Crowdsourcing smart contract audits can address these challenges.
Hats Finance is a decentralized Web3 security protocol that aims to enhance Web3 security through scalable and innovative audits, a result-oriented model, and community engagement. By offering decentralized audit competitions, the platform improves Web3 safety for all participants.
Projects can utilize Hats Finance to launch permissionless and automated audit competitions without the need for pre-scheduling or legal work. Security researchers are invited to scrutinize submitted codes, contributing to a more secure Web3 environment.
Hats Finance distinguishes itself as the only auditing platform with a pay-for-results model. A 20% payout fee is only incurred if the audit identifies a vulnerability, preventing wasted resources and incentivizing security researchers.
In addition to audit competitions, Hats Finance offers a bug bounty program where projects can reward submissions for identified bugs. The platform, backed by nearly $4 million in seed funding, aims to expand its competitions and further engage the community in ensuring continuous and autonomous security for Web3 projects.
Through its innovative approach to audits and bug bounties, Hats Finance is working towards a more secure Web3 ecosystem with increased community involvement and improved quality assurance.