Cointelegraph recently announced that Hats Finance, a platform focused on community participation in on-chain audit competitions and bug bounties, has joined the Cointelegraph Accelerator program. Smart contracts, which automate on-chain agreements, are essential for decentralized finance (DeFi). Regular audits are crucial to prevent attacks and ensure the smooth operation of decentralized apps (DApps) and Web3 as a whole.
However, a report revealed that only 44% of Web3 projects underwent smart contract audits in the first quarter of 2024. Skipping audits can pose significant security risks, as seen in many hacked projects that did not undergo audits. With smart contracts becoming more complex due to new use cases like real-world assets and modular wallets, the need for thorough audits has never been greater.
Decentralized projects require decentralized audits. Traditional audits may not meet the needs of the fast-paced and diverse Web3 environment, as they involve a limited number of auditors or a single team, increasing the risk of missing vulnerabilities. The process can be lengthy, causing delays in launching updates or features.
The cost of an average audit ranges from $5,000 to $15,000, with more complex projects facing six-figure bills. Crowdsourcing smart contract audits can offer a solution to these challenges.
Hats Finance is a decentralized Web3 security protocol that aims to enhance Web3 security through scalable and innovative audits, a results-driven model, and community engagement. By offering decentralized audit competitions, the platform improves Web3 safety for all participants.
Projects can leverage Hats Finance to launch permissionless and automated audit competitions without the need for pre-scheduling or legal work. Security researchers can scrutinize submitted codes, reducing the time from vulnerability discovery to patch compared to traditional audits. Successful submissions can boost auditors’ reputation in the Web3 space.
Hats Finance is the only auditing platform that operates on a pay-for-results model, with a 20% payout fee only if a vulnerability is detected. This model encourages audits for projects, incentivizes security researchers, and ensures a higher level of quality assurance.
In addition to audit competitions, Hats Finance offers a bug bounty program. Projects can launch their own bug bounty program after meeting certain requirements, rewarding submissions for identified bugs with project tokens.
With nearly $4 million in seed funding, Hats Finance plans to expand its operations. By involving the community in the audit process and reducing entry barriers for auditors, the platform aims to provide continuous and autonomous security for Web3 projects.