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General intro to key aspects of the protocol
Hats.finance is a builder of self-sufficient and autonomous security infrastructure capable of integration with major DeFi protocols, helping secure millions of users’ assets.
Hats has a mission to become the decentralized infrastructure of choice for Web3 security. Committed to the DeFi ethos, Hats uses a variety of proactive distributed security mechanisms to support the Web3 ecosystem to become more robust, secure, and scalable.
Our protocol was founded on the premise that a decentralized financial system needs decentralized security solutions. This led to the creation of a protocol that uses bug bounties to align incentives for all stakeholders. The result has been a security primitive now being used in a variety of novel ways.
In addition to its originally conceived decentralized bug bounty ecosystem, Hats also offers skin-in-the-game audits and audit competitions with more use cases coming. Over time, we intend to become the go-to Web3 security marketplace.
Audit competitions are time-based open calls to audit. Our audit competitions enable projects to get high quality auditors to compete with one another to secure smart contracts fast.
Hats’ audit competitions have a variety of advantages including:
- Quick spin-up time to get security professionals eyes on code quickly.
- Leveraging the power of distributed work by getting more eyes on code.
- Reducing auditing costs through projects only paying for valid vulnerabilities.
- Only the first submitter for each issue is rewarded, enabling individuals to be significantly compensated, reducing redundant work and increasing the speed of submissions.
Read more on the Audit Competition doc page.
Traditional audits can often leave projects concerned about the quality of their findings. Hats has created a mechanism that enables auditors’ work to be vetted, further strengthening the validity of their work.
Using the Hats.Finance protocol, audit firms:
- Deposit a percentage of their service fee into their client project’s bug bounty for a set period of time.
- Share the cost of successful submissions within this time by contributing a corresponding percentage.
- Are incentivized to stay engaged in client projects ongoing security.
Read more on the Skin-in-the-Game Audit doc page.
Our bug bounty ecosystem operates in accordance with the decentralized tenets of Web3. This has a range of advantages for projects, users and security professionals.
Hats’ bug bounties are unique in a variety of ways including:
- Projects and users can contribute liquidity to the vault
- Liquidity mining is supported for vault contributors (upon TGE)
- All submission processes are fully on-chain
- Due to the peer-to-peer nature of the platform, it is impossible for security researchers to be tracked
- Support for composable smart contracts
- A decentral arbitration mechanism can used to resolve disputes
Read more on the Bug Bounty doc page.
Key Elements of the Protocol
Hats allows any party to establish and maintain secure communications between individuals and protocol committees.
Automated escrows support fair transactions of highly sensitive information.
Hats has created the means for disputed settlements to be escalated to a decentralized arbitration service ensuring fair process and outcomes to all parties. This feature will be launching very soon.
Synergies and Risk Sharing
Hats’ core operating ethos is alignment of incentives. As such, the protocol facilitates collaboration between all actors in the space. Protocols, their users, external security professionals, and Hats itself are incentivized to share risk and to access rewards.