Balancer Labs is offering white hat hackers $2 million to report Balancer V2 bugs

Balancer Labs is offering a 1,000 ETH -- or about $2 million -- bounty prize to anyone that finds vulnerabilities in version 2 of its decentralized finance protocol.

The outsized bug bounty is meant to incentivize "ethical" or white hat hackers to look for and report any issues in Balancer V2, the next iteration of the automated portfolio manager and liquidity provider.

Per the company's website, vulnerabilities are set on a scale from "critical" to "low" with critical severity reports receiving 1000 ETH and low severity reports receiving 5 ETH. 

Some examples of critical vulnerabilities include draining or permanently locking significant funds in Vault, while less significant vulnerabilities include minor rounding errors that enable an attacker to "manipulate balances to their advantage."

“Apart from being the largest on record, our bug bounty is innovative in that it scales as ETH goes up, in correlation with the broad crypto market and likely with the total value locked in Balancer protocol," said Balancer Labs CEO Fernando Martinelli. "The more there is at stake, the higher we believe our bug bounty rewards should be. The bug bounty program empowers everyone in the developer community to help us build a better Balancer.”

As The Block previously reported, many DeFi projects have made use of such bounty programs to ensure their platforms are secure and regulated. Using third-party hackers is a way for projects to show their users that they are prioritizing the security of their funds.