Hacker opts for $2M bug bounty over printing more `Ether`

TL;DR Breakdown

• Hacker named Jay Freeman chooses $2M as his bug bounty instead of creating an infinite supply of “Ether.”
• It isn’t the first time that ethereum has been hacked. In recent years, it has been prone to hacking attacks.

Over the last few years, hackers have stolen millions of dollars worth of Ethereum. Earlier this month, a self-styled “grey hat” hacker discovered how to exploit Ethereum scaling solution Optimism into effectively creating limitless Ether.

Hacker Jay Freeman chooses a bug bounty

Another huge loss was prevented by software engineer Jay Freeman, who goes by Saurik online and is the creator of Cydia iOS jailbreaking software. He didn’t take advantage of the hack. Instead, he informed Optimism’s development team about the problem, which rewarded him $2 million as a bug bounty.

Freeman’s most recent projects include blockchain-scanning bug searches. Freeman discovered the error while researching so-called “nano payment protocols.” He discovered a bug in Optimism’s code that instructs smart contracts to self-destruct and return the sender’s related Ether. The smart contracts could then be exploited to mint layer-2 Ether.

Users use the Optimism Protocol to exchange tiny amounts of cryptocurrency with minimal transaction fees, although there are some security risks. In addition, the platform creates separate Ether tokens that only exist on the Optimism Network.

The small bug could have resulted in the creation of unlimited amounts of Ether; hence, it can cause havoc across the broader cryptocurrency sector. These bugs are referred to as overflow bugs. They are security flaws that allow attackers to get around the network’s defenses. In 2010, someone exploited the Bitcoin software to produce 184 billion BTC.

The hacker noted that someone from Etherscan, the Ethereum blockchain explorer, had found the flaw on Christmas Eve last year but may not have recognized its significant harm.

Ethereum becomes prone to hacks

Hacks on the Ethereum cryptocurrency began in 2016. In June that year, an unknown individual started stealing money from Ethereum’s first decentralized autonomous organization, or DAO. The DAO was established weeks earlier, following a $150 million crowdsale.

Due to poor coding that contains flaws, Ethereum smart contracts become vulnerable to hacking. In January 2022, Crypto.com, one of the world’s major cryptocurrency exchanges, was allegedly hacked. According to reports, the hackers stole at least $15 million in Ethereum.

The most recent bug hack example is when hackers robbed the Wormhole cryptocurrency platform for $325 million after a code mistake on GitHub. The attack occurred on February 2nd, and it was discovered when a tweet from the Wormhole Twitter account stated that the network was being shut down for maintenance.

The Wormhole team subsequently offered the hacker a $10 million reward to return the money, which was included as text in a transaction sent to the attacker’s Ethereum wallet address.