New Audit Competition With Smooth By Dappnode! Rewards Up To $20K in DAI

HatsFinance
6 min readOct 26, 2023

Starting Oct 27th , 2023, at 16:00 GMT to Nov 10th, 2023, at 16:00 GMT

We invite all white hat hackers to join the hunt on Smooth by Dappnode 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 Oct 27th, a new vault will open in the Hats dApp — “Smooth”.
Participants can check the contracts in scope and start searching for bugs.

Smooth is an MEV Smoothing Pool. It helps earn higher rewards on average by pooling MEV rewards among a group of Stakers.

It works by setting the Fee Recipient address to the Smooth Smart Contract, and the rewards that the Smart Contract receives are distributed among all those who are pooling their rewards.

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 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!

Audit competition rewards

  • Deposited Amount: The deposited ~$20K in DAI, making the available prize pool ~$16K in DAI.
  • Service Fee: All rewards mentioned in this article and on the Hats dApp UI have already deducted a 20% Hats service fee.

High Severity

The total prize pool for High severities is set at ~$8,910 in DAI.
A service fee of 20% service fee is already deducted from this prize pool.
Each new issue gets 1 point. The total High-severity reward will be divided between all accepted issues.

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

The total prize pool for Medium severities will be ~$4,860 in DAI
Each new issue gets 1 point. The total Medium severity reward will be divided between all accepted issues.
A service fee of 20% service fee is already deducted from this prize pool.

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

The total prize pool for Low severities will be ~$1,620 in DAI.
Each new issue gets 1 point. The total Low severity reward will be divided between all accepted issues.
A service fee of 20% service fee is already deducted from this prize pool.

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:

The total prize pool of Gas Saving severity is set at ~$800 in DAI.

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

Distribution:

  • 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, with the test suite unchanged.
  • 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 “Smooth Audit Competition” under the Hats.finance organization 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 OCT 27th at 16:00 GMT and ends on NOV 10th at 16:00 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 ~$16K In DAI 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 Smooth Audit Competition today and be a part of 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

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HatsFinance

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