What Are the Trade-Offs between Formal Verification and Bug Bounties?
Formal verification offers a mathematical proof of correctness against a defined specification, providing the highest certainty for critical properties, but it is expensive and time-consuming. Bug bounties offer a crowd-sourced, continuous security check where white-hat hackers are incentivized to find and report vulnerabilities in live code.
Bug bounties are cheaper and can find logic flaws that were not covered by the formal specification, but they offer no guarantee that all bugs have been found. The best practice is often to use both.
Glossar
Formal Verification
Rigour ⎊ Formal verification, within cryptocurrency, options trading, and financial derivatives, establishes mathematical proof of system correctness, moving beyond empirical testing to guarantee code behavior aligns with intended specifications.
Bug Bounties
Incentive ⎊ Bug bounties within cryptocurrency, options trading, and financial derivatives represent a crowdsourced security audit mechanism, offering rewards for identifying vulnerabilities in smart contracts, trading platforms, or derivative protocols.
Bug Bounty Program
Incentive ⎊ Within cryptocurrency derivatives, options trading, and financial derivatives, a bug bounty program represents a formalized initiative designed to solicit external scrutiny of codebase and infrastructure for vulnerabilities.
Proof of Correctness
Attestation ⎊ Within the convergence of cryptocurrency derivatives, options trading, and financial engineering, attestation signifies a formalized process validating the integrity and accuracy of underlying data or computations.
Verification
Attestation ⎊ Verification within cryptocurrency, options trading, and financial derivatives functions as a critical process confirming the validity of transactions and data integrity, particularly vital in decentralized systems lacking central authorities.
Critical Bug
Exploit ⎊ A critical bug within cryptocurrency, options trading, and financial derivatives represents a systemic vulnerability enabling unauthorized manipulation of protocol state or financial instruments.