(Rejected) Web3 Bug-bounty Platform Immunefi Raises $24M from Series A Funding

Immunefi, a Singapore-based bug bounty and security services platform for web3, announced on Thursday that it has raised $24 million in its Series A funding round. The round was led by Framework Ventures. Other investors include Samsung Next, Electric Capital, and Polygon Ventures.

Immunefi is focused on offering bug bounty and security services to Web3 projects. Since its launch in December 2020, the company has saved over $25 billion in users’ funds. Immunefi guards billions of dollars in users’ funds across projects like Synthetix, Chainlink, SushiSwap, PancakeSwap, Bancor, MakerDAO, Compound, Alchemix, Nexus Mutual, and others. The firm said it has paid out $60 million in total bounties.

Mitchell Amador, the CEO of Immunefi, acknowledged that “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.”

The executive disclosed how the company is going to use the fresh funding raised. “We’re using this raise to scale our team to meet this massive challenge,” Amador stated.

The platform hosts a massive community of whitehat hackers who review projects’ blockchain and smart contract codes, find and disclose vulnerabilities and get paid for making cryptocurrency safer.

Why are many DeFi firms implementing bug bounty programs?

Decentralized finance (DeFi) platforms have become a major target for hackers and online thieves looking for the next big crypto heist.

In the first three months of 2022, crypto worth $1.3 billion was stolen from exchanges, platforms, and investors. out of this, a whopping 97% was stolen from DeFi platforms. In March this year, unidentified hackers stole funds totaling $615 million from Blockchain project Ronin.

Almost all crypto hacks are the result of security breaches in which hackers gain access to private keys of the victims. However, DeFi thefts are more sophisticated as hackers spend hours scanning over to target specific bugs within DeFi software platforms.

There is a growing necessity for bug bounties because not all platform developers have the skills to detect bugs and vulnerabilities.

In June, Aurora, an Ethereum Virtual machine built on the NEAR Protocol, paid a $6 million reward to a white hat hacker for identifying a key bug. Aurora paid the bounty through the Immunefi platform.

In May, crypto bridge Wormhole — which connects different blockchains — paid $10 million to an ethical security hacker that also discovered a bug through Immunefi’s platform.

And recently many other projects like MakerDAO announced bounties of $10 million and Olympus DAO $3.3 million. The trend signals that these projects are taking bounties and security seriously and want to prevent financial losses.