Catalyst — rewards up to $64K in USDC

HatsFinance
8 min readJan 23, 2024

Starting Jan 24, 2024, at 15:00 GMT to Feb 7th, 2024, at 15:00 GMT

We invite all white hat hackers to join the hunt on the Catalyst audit competition.

All experience levels are welcome; whether you are a seasoned security veteran or an amateur, show us what you’ve got! Prizes will be given based on the severity level of each vulnerability found.

About the Competition

Starting Jan 24, 2024, a new vault will open in the Hats dApp — “Catalyst”
Participants can check the contracts in scope and start searching for bugs.

The Cross-Chain AMM to Connect Every Chain
Catalyst is an AMM based on the Unit of Liquidity. This enables Catalyst to simulate a Uniswap v2 or Balancer style Pool cross-chain. Using Catalyst, any chain can swap assets with major blockchains like Cosmos, Ethereum, and its rollups.

Catalyst uses Generalised Incentives to communicate cross-chain with AMBs. Generalised Incentives are meant to enhance and standardize relayer incentives. It includes features like gas refund for unspent gas, conditional payment on execution, and prepayment for acknowledgments.

The competition code language is Solidity and the SLOC estimation for this competition is ~2300 SLOC for Catalyst and ~750 SLOC for Generalised Incentives.

To reduce transaction costs, we’re shifting our audits vault to Layer 2 networks. Specifically, this competition is hosted on Arbitrum for more efficient fee management.

Stay up-to-date with the competition, chat with the team, and get your questions answered by joining the dedicated Discord channel on the Hats server.

All audit reports can be found in src/audit in their respective repositories. All audit reports will be published in our Discord on the day of the competition. Don’t miss the latest updates and insights — join now and be the first to know!

Winners of this competition will need to undergo either a light or a complete KYC process (above $15k prizes) due to Catalyst Foundation legal requirements. Please find the full KYC disclaimer below for further information.

Audit competition rewards

  • Deposited Amount: The deposited amount is ~$80K in USDC, making the available prize pool ~$64K in USDC.
  • Service Fee: All rewards mentioned in this article and on the Hats dApp UI have already deducted a 20% Hats service fee.
  • Severities: Low, Medium, High, Gas saving

Rewards and calculation
For our audit competition, the entire prize pool is up for grabs across all severity levels. Each severity level has a designated point value, and the maximum payout per severity is limited by the defined cap.

Maximum Reward Caps per Submission:

  • Low Severity: 1,000 USDC
  • Medium Severity: 15,000 USDC
  • High Severity: 30,000 USDC
  • Catalyst Gas: 3,333 USDC, 1,666 USDC
  • Generalized Incentives Gas: 666 USDC, 333 USDC

Points Allocation per Severity:

  • Low: 1 point
  • Medium: 15 points
  • High: 30 points
  • Gas saving 1st: No points. Fixed reward
  • Gas saving 2nd: No points. Fixed reward

*For simplicity, we commend having a relation between the points and the cap. If the cap is 2,000 USDC we recommend allocating 2 points per valid submission.

Points are consistently awarded within the same severity level unless the committee decides to adjust this. For instance, both the first and second low-severity findings will earn 1 point each. This standard applies to medium and high severities as well.

Calculating the Winner’s Reward:

The formula for a winner’s reward is as follows:

Point Value= Prize Pool / Total Points*

*Awarded for the entire competition

Examples for Clarity:

Example #1:

  • 155 Low Severity: 155 points
  • 1 Medium Severity: 15 points
  • 1 High Severity: 30 points

Total points: 200

In this scenario:

  • Value of 1 Point = 64,000 USDC/200 Total points = 320 USDC
    The rewards for this example will be as follows:
  • Low (163 points): $320 each
  • Medium (15 points): $4,800 in total.
  • High (30 points): $9,600 in total.

Example #2

  • 50 Low Severity: 50 points

Total points: 50

In this scenario:

  • Value of 1 Point = 64,000 USDC/50 Total points = 1280 USDC
  • The rewards for this example will be as follows:
  • Low (50 points): $1000 each

Severities

High Severity

Issues that will qualify for this bracket will be assigned 30 points.

High-severity vulnerability description:

For a submission to be considered a HIGH-risk vulnerability, issues must:

  • Direct theft of any user funds, whether at rest or in motion
  • Long-term freezing of user funds
  • Theft or long-term freezing of unclaimed yield or other assets
  • Protocol insolvency

Medium Severity

Issues that will qualify for this bracket will be assigned 15 points.

Medium severity vulnerability description:

Issues that lead to an economic loss but do not lead to direct loss of on-chain assets. Examples are:

  • Gas griefing attacks (make users overpay for gas)
  • Attacks that make essential functionality of the contracts temporarily unusable or inaccessible
  • Short-term freezing of user funds

Low severity

Issues that will be qualified for this bracket will be assigned with 1 point.

Low severity vulnerability description:

  • Issues where the behavior of the contracts differs from the intended behavior (as described in the docs and by common sense), but no funds are at risk.

Gas Saving:

Issues that will be qualified for this bracket will not be assigned but will be awarded a fixed reward.

This competition will reward participants with ideas to maximize gas savings.

Distribution Catalyst:

Price Pool: 5k

  • The first place gets ⅔ (66.6%) of the prize pool.
  • The second place gets ⅓ (33.3%).

Distribution Generalised Incentives:

Price Pool: 1k

  • The first place gets ⅔ (66.6%) of the prize pool.
  • The second place gets ⅓ (33.3%).

Gas Saving Guidelines:

  • Submissions should contain links to zip files with a copy of the project repository containing the gas-saving changes commented with “//Gas saving”. The TestDeployAddresses.t.sol has to be disabled for Catalyst, and several tests for Generalised Incentives must also be disabled.
  • Please use Google Drive or a similar service and attach the link to your submission.
  • Optimizations should use solidity (no inline assembly).
  • Due to the rules category, submissions will not be public and will only be shared with the committee.
  • Entries will be measured on the total average amount of gas used for each function (i.e., the sum of all numbers in the “avg” column), as reported by the
    hardhat-gas-reporter when running the tests in the repository

Limitations

Reporters will not receive a bounty for any known issue, such as:

  • Issues mentioned in any previous audit reports
  • Vulnerabilities that were already made public (either by HATs or by a third party)
  • “Centralization risks” that are known and/or explicitly coded into the protocol (e.g. an administrator can upgrade crucial contracts and steal all funds)
  • Attacks that require access to leaked private keys or trusted addresses
  • Issues/contracts mentioned in the out-of-scope section

Submission Guidelines — High/Medium/Low severities:

General Information:

  • The Hats team will create a new repository called “Catalyst audit competition” under the Hats.finance organisation on GitHub. The repository will be kept private until the competition starts. Hats bot will fork it on the first submission. To participate, security researchers must submit their findings on-chain, and an automatic GitHub issue will be generated in the forked repository.
  • How it Works: Video Explanation

SUBMISSION GUIDELINES:

  • Submissions should be made using our Dapp.
  • You can submit one on-chain submission mentioning all issues found on the repo.
  • All new submissions will be created on Hats forked repo on Hats: Hats GitHub

Report Format:

  • Please send a plain ASCII description in the following format:
  • [TITLE]: A short description of the issue.
  • SEVERITY: Either High, Medium, or Low (as per the rules).
  • Submission should contain at least one test demonstrating the problem and, if possible, a possible fix.

Report Template:

  • Description: Describe the context and the effect of the vulnerability.
  • Attack scenario: Describe how the vulnerability can be exploited.

Attachment:

  • Proof of Concept (PoC) File: Provide a file containing a proof of concept (PoC) that demonstrates the vulnerability.
  • Revised Code File (Optional): If possible, provide a second file containing the revised code that offers a potential fix for the vulnerability. This file should include:
  • Comment with a clear explanation of the proposed fix.
  • The revised code with suggested changes.
  • Add any additional comments or explanations clarifying how the fix addresses the vulnerability.
  • Recommendation: Describe a patch or potential fix for the vulnerability.

***Due to the nature of the audit competition mechanism, the report will not be encrypted.***

Evaluation:

  • The first participant to submit an issue following guidelines gets a bounty for that issue (issues already received or out of scope will not receive a reward).
  • The competition starts on Jan 24nd at 15:00 GMT and ends on Feb 7th at 15:00 GMT.
  • Issues that we are aware of (as witnessed by any open issues in the repository) will not be eligible for the bug bounty.

Compensation and Impact

A prize pool of ~$64K USDC and NFT rewards from our hacker collection will be distributed among security researchers who submit eligible vulnerability disclosures.

Compensation payment timeline:

  • Ten days after the competition ends, we will announce a winner list.
  • Alongside the winner announcement post, submitters can send disputes to the committee team and request clarification. They can also involve the Hats security team in the process. The goal is to facilitate honest and professional debate regarding disputed submissions.
  • Between 7–14 days after the announcement, we will publish a split contract where the winners can claim their rewards.
  • HATS Service Fee: A 20% deduction from the payout will always be allocated as the service fee.

Security researchers play a crucial role in fostering trust and confidence in Web3 technologies, paving the way for mass adoption. By participating in this competition, security researchers can gain recognition for their work, raise their profile, and make valuable connections in the Web3 security ecosystem. Ultimately, they can contribute to creating a more secure and equitable community.

Join the Catalyst Audit Competition today and participate in the movement to secure the future of Web3 and decentralized finance. Check the Hats Finance dApp for more information and in-scope contracts.

Stay tuned and check Hats dApp:https://app.hats.finance/audit-competitions

KYC and AML Disclaimer for Audit Competition

Eligibility for prizes is subject to compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) policies as outlined below.

Prize Disbursements and KYC Requirements

For Prizes Under $15,000: Participants who receive a prize amount less than $15,000 are required to disclose their full legal name, physical address and wallet address to the Catalyst Foundation (or a designated third-party service provider). This information is necessary for the disbursement of the prize and for basic identity verification purposes.

For Prizes of $15,000 or More: Participants who receive a prize amount of $15,000 or more are subject to a full KYC process. This process will be conducted by the Catalyst Foundation (or a designated third-party service provider). Participants will be required to provide additional identification documentation, which may include but is not limited to a government-issued photo ID, proof of address, wallet address and email address. Participants agree to comply with reasonable requests on KYC and acknowledge and understand that failure to complete the KYC process may result in the forfeiture of the prize.

Data Use and Privacy Disclaimer

By participating in the Competition, you agree to our collection, use, and sharing of your personal information as described in this disclaimer. The information collected during the KYC process is used solely for the purposes of identity verification, compliance with AML regulations, and prize disbursement. The Catalyst Foundation is committed to protecting your privacy and will take appropriate measures to ensure the security of your personal information.

Your data may be shared with regulatory authorities and law enforcement agencies if required by law or if necessary for the prevention of fraud and other illegal activities. Except as described herein or in our Privacy Policy, your personal information will not be shared with third parties without your consent.

Please note that participation in the Competition is voluntary. By submitting your information and participating, you acknowledge and agree to these terms. Send KYC details to security@catalyst.foundation.

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