Hydro is a decentralized platform that enables ATOM stakers to lock their ATOM to gain voting power, and then vote on project bids for Protocol-Owned Liquidity (PoL) deployments. Projects submit bids and offer tributes in exchange for liquidity, and users allocate their voting power to the bids they want to support.

Direct theft of any user funds, whether at-rest or in-motion, other than unclaimed yield

Direct theft of any user NFTs, whether at-rest or in-motion, other than unclaimed royalties

Permanent freezing of funds

Permanent freezing of NFTs

Unauthorized minting of NFTs

Predictable or manipulable RNG that results in abuse of the principal or NFT

Unintended alteration of what the NFT represents (e.g. token URI, payload, artistic content)

Protocol insolvency

Theft of unclaimed yield

Theft of unclaimed royalties

Permanent freezing of unclaimed yield

Permanent freezing of unclaimed royalties

Temporary freezing of funds

Temporary freezing of NFTs

Griefing (e.g. no profit motive for an attacker, but damage to the users or the protocol)

Manipulation of governance voting result deviating from voted outcome and resulting in a direct change from intended effect of original results

Hydro Codebase

Documentation

Rewards are distributed according to the impact of the vulnerability based on the Immunefi Vulnerability Severity Classification System V2.3. 

__Reward Calculation for Critical Level Reports__

For critical smart contract bugs, the reward amount is 10% of the funds directly affected up to a maximum of USD 25,000. The calculation of the amount of funds at risk is based on the time and date the bug report is submitted. However, a minimum reward of USD 5,000 is to be rewarded in order to incentivize security researchers against withholding a critical bug report.

__Repeatable Attack Limitations__

- If the smart contract where the vulnerability exists can be upgraded or paused, only the initial attack will be considered for a reward. This is because the project can mitigate the risk of further exploitation by upgrading or pausing the component where the vulnerability exists. The reward amount will depend on the severity of the impact and the funds at risk. 


- For critical repeatable attacks on smart contracts that cannot be upgraded or paused, the project will consider the cumulative impact of the repeatable attacks for a reward. This is because the project cannot prevent the attacker from repeatedly exploiting the vulnerability until all funds are drained and/or other irreversible damage is done. Therefore, this warrants a reward equivalent to 10% of funds at risk, capped at the maximum critical reward. 

__Reward Calculation for High Level Reports__

- High vulnerabilities concerning theft/permanent freezing of unclaimed yield/royalties are rewarded within a range of $2,500 to $5,000 depending on the funds at risk, capped at the maximum high reward.  

- In the event of temporary freezing, the reward doubles from the full frozen value for every additional 24h that the funds are temporarily frozen, up until a max cap of the high reward. This is because as the duration of the freezing lengthens, the potential for greater damage and subsequent reputational harm intensifies. Thus, by increasing the reward proportionally with the frozen duration, the project ensures stronger incentives for bug disclosure of this nature.

__Reward Payment Terms__
Payouts are handled by the Hydro team directly and are denominated in USD. However, payments are done in USDC on Cosmos Hub. 

The calculation of the net amount rewarded is based on the average price between CoinMarketCap.com and CoinGecko.com at the time the bug report was submitted. No adjustments are made based on liquidity availability.