In a recent turn of events, blockchain firm Virtuals Protocol was forced to issue a timely fix and relaunch its bug bounty program after an unexpected bug was discovered in one of its audited smart contracts.
On December 3, 2024, pseudonymous security researcher Jinu reached out to Virtuals Protocol after discovering the bug. However, upon reporting the issue, Jinu learned that the company did not have an active bug bounty program, which meant the discovery did not qualify for a reward.
The Discovery of the Vulnerability
According to Jinu, the Virtuals Protocol team acknowledged the white hat bug discovery and even closed the Discord group created solely to report the vulnerability. In an X thread, Jinu shared his findings:
The vulnerability is simple and can impact the virtuals ecosystem (but virtuals probably doesn’t care about security).
Jinu explained to Cointelegraph that the vulnerability was related to a lack of validation when creating AgentTokens based on the internal bond threshold. If exploited, this vulnerability would have prevented AgentTokens from being generated until the contract was fixed.
The Fix and Apology
After the information was made public on X, Virtuals Protocol contacted Jinu and issued an immediate fix. The company representatives apologized for earlier miscommunication and thanked Jinu for reporting the issue:
Hey jinu we have verified the vulnerability and applied a patch below. Thank you for bringing this up to us and we apologise for the miscommunication between support and yourself. Let us internally review the severity of the issue and we will issue you a bug bounty shortly.
However, when asked about the bounty expectations, Jinu stated that they are unaware of the general rewards for bug discoveries. Jinu told Cointelegraph that they got interested in Virtuals Protocols after a friend invested in a token created on Virtuals:
I spent about 30 minutes looking at the code to see if it was well done.
The Bug Bounty Program and Reward Expectations
Cointelegraph reached out to Virtuals Protocol for comment, but as of now, there is no update on the bug bounty reward for Jinu. The company has yet to decide on a suitable reward for the researcher’s discovery.
In an effort to understand the bug bounty expectations, Jinu explained that they are unaware of the general rewards for bug discoveries. As a security researcher, Jinu emphasized the importance of timely fixes and proper communication between companies and white hat hackers:
The most important thing is that Virtuals Protocol fixed the issue quickly and apologized for the miscommunication.
The Importance of Bug Bounty Programs
Bug bounty programs are essential in ensuring the security of smart contracts. These programs incentivize researchers to identify vulnerabilities and report them to the company, allowing for timely fixes and preventing potential losses.
Virtuals Protocol’s decision to relaunch its bug bounty program demonstrates a commitment to transparency and security. As the crypto industry continues to grow, companies must prioritize bug bounty programs to protect their users’ assets.
Conclusion
The discovery of the vulnerability in Virtuals Protocol’s smart contract highlights the importance of timely fixes and proper communication between companies and white hat hackers. The company’s decision to relaunch its bug bounty program demonstrates a commitment to transparency and security, which is essential for building trust in the crypto industry.
As the crypto landscape continues to evolve, it is crucial that companies prioritize bug bounty programs and ensure that their smart contracts are secure. By doing so, they can protect their users’ assets and maintain a reputation as a trustworthy player in the industry.
Recommendations
- Implement robust bug bounty programs: Companies must establish and maintain active bug bounty programs to incentivize researchers to identify vulnerabilities.
- Ensure timely fixes: Companies must prioritize timely fixes for identified vulnerabilities to prevent potential losses.
- Communicate effectively with white hat hackers: Companies must communicate effectively with white hat hackers, acknowledging their contributions and providing updates on the status of reported issues.
- Invest in security research: Companies should invest in security research and development to stay ahead of potential threats.
Future Developments
As the crypto industry continues to grow, it is essential that companies prioritize bug bounty programs and ensure that their smart contracts are secure. The discovery of the vulnerability in Virtuals Protocol’s smart contract highlights the importance of timely fixes and proper communication between companies and white hat hackers.
In the future, we can expect to see more emphasis on bug bounty programs as a crucial aspect of building trust in the crypto industry. Companies must prioritize transparency, security, and communication with their users to maintain a reputation as trustworthy players.
Additional Resources
- How crypto laws are changing across the world in 2025: Read about the latest developments in crypto regulations.
- Winners and losers of 2024: A year of all-time highs, hacks, and hodling: Review the major events that shaped the crypto industry in 2024.
