Hacker Scoops Up $2 Million Bounty After Spotting Fatal Flaw In Ethereum Rollup

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A hacker has made off with $2 million in bug bounty after discovering an alarming vulnerability with the Ethereum community. This bug might have been very dangerous if it had been discovered by black hat hackers who might have exploited the digital asset for billions of {dollars} value of ETH. As a substitute, a ‘gray hat’ hacker popularly generally known as Saurik knowledgeable the Ethereum group of the vulnerability, netting himself a large reward in return.

Discovering The Vulnerability On Ethereum

Hacker Saurik had discovered the vulnerability on Optimism, an Ethereum layer 2 rollup answer. The hacker himself published a report as to how he discovered the vulnerability on the answer. Wanting by means of nano funds protocols on the rollup, he had discovered a vulnerability that would enable an attacker to withdraw unbridled a ‘nearly limitless’ quantity of ETH from the answer.

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It was much like the assault methodology deployed on fashionable good contracts blockchain Solana that resulted within the $353 million hacks on Wormhole. Optimism, like Wormhole, mint what are generally known as “Wrapped Ether.”  Customers deposit their Ether on the good contract to mainly function collateral and they’re even these tokens that solely exist on Optimism’s community. They then use nano funds protocol to make transactions sooner and faster.

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Saurik who’s famously identified for growing the Jailbroken iOS had confirmed the vulnerability. Nevertheless, as a substitute of exploiting the vulnerability for his personal private acquire, the self-styled gray hat hacker had reported it to the Optimism devs. In return, Saurik was rewarded with a $2 million bounty for his altruism, which has helped to make the community and layer 2 rollup safer for customers.

Debunking Standard Rumors

After information of the vulnerability and subsequent bounty fee broke, there have been rumors circulating concerning what an attacker might have carried out with it in the event that they selected to not report it to the devs. The preferred of those has been that the attacker would have been capable of withdraw a vast quantity of ETH from the community. Whereas this has some benefit to it, it’s largely false.

Firstly, the vulnerability exists on a layer 2 rollup answer Optimism. Whereas the protocol exists on the ethereum community, it isn’t the community itself. Which means the vulnerability was localized to the protocol alone. So whereas an attacker would have been capable of exploit this to withdraw an ‘limitless’ quantity of ETH, they might solely withdraw the accessible stability on the Optimism handle.

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However, it’s nonetheless no secret that the outcomes would have been devastating for customers of the layer 2 protocol if a black hat hacker had discovered the vulnerability. This occasion speaks volumes in regards to the usefulness of bug bounties. Whereas the rewards for these bounties could appear too massive at first, one should take into consideration what the choice could be if there was no incentive for hackers to return ahead with their findings. White hat hackers little question assist to avoid wasting hundreds of thousands, if not billions, of {dollars} yearly.

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