As a reasonable measure to strengthen cyber security, a project plans on developing a vault system that helps reward good hackers. Hackers instead of using their professional skills in perpetrating criminal acts are instead encouraged to reveal noticed vulnerabilities to a set committee.
The cybersecurity network has closed the funding deal of about 3.5 million dollars to launch the dapp. This fresh influx of capital will be instrumental in powering cybersecurity initiatives. The seeding funding will further support in creating a strong network for incentivizing hackers to strengthen the DeFi ecosystem. Hats Finance’s bug reward will include a limited amount of 100,000 HATs tokens. This incentive system will be officiated by different community stakeholders and project managers of the decentralized system.
Hats acknowledges this deal with Greenfield One and Lemniscap. The scheme announces its stamp of deal with other crypto veteran participants. They include; Collider Ventures, Accomplice, and Spartan Capital. First capital and structuring support are extended by Collider Labs.
The Hats Finance board will have a vault bug reward system, with a limited supply of HATs tokens in distribution among investors and stakeholders. Incitation from hackers is aided by circling tokens, simultaneously regulating the market’s token.
Whenever an exploitable error is detected, a hacker alerts the designated committee of the specific vault. This is done instead of exploitation of such advantages for self benefits. The committee comprises different programmers, project developers, and researchers. Power to choose to either approve or deny a specific alert is vested on this set of savvy software technicians. If an alert gets approval, a successive release of some tokens as allotted from the vault is rewarded to the hacker for such heads up.
With the creation of different vaults, accompanying a distinct committee involves overseeing several niches. Hats makes provision for compensation with the same token initially probable to cyber predators. Different NFT artists have made their availability known for partnership. They propose to build various NFTs, strictly for compensating hackers and other cybercops, who are result yielding.
An off-chain encrypted communication network assists hackers in reporting their findings to their committees without being detected. The on-chain is a timestamp assurance serving the purpose of ensuring readjustments in coding and dapp’s structure by project developers.
The Black hat tag changes to White hat
Notorious hackers are often tamed by this system. In the current Hats setup, they are encouraged to use their skills for cyber defense. In other words, the provision of incentives to a self-employed hacker with initial ill intentions turns this narrative around. As the project grows, so will the incentive awarded hackers, hence spurring them to do more and curbing cybercrimes.
How the system works
A hacker originally with a criminal mindset who notices a system code glitch on a token’s Defi protocol harvests this opportunity to get away with a large sum of money. This hacker undoubtedly takes a huge risk which might even be detected by programming operators of the Defi protocol; thereby causing a lot of loss in token amounts and an unrecoverable loss by investors. And before he gets a chance at laundering any sum at all, he’s probably caught and heavily persecuted.
What Hats’ proposed vault reward system does is create another safe route for such hackers. On detecting the vulnerability, he immediately alerts the vault committee using closed off-chain communication. By doing so, he is rewarded accordingly. NFT space also brings this hacker into the limelight as a form of non-monetary reward, further propagating such dexterity and openness for future partnerships.
Formation of the network
Hats vault network is a composite of prominent crypto investors. It includes different programmers, R & D experts, and other contributors from successful crypto ventures. The Dev team has the Prysmatic Labs expertise, an erstwhile R&D manager and numerous other contracting auditors.