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+# PrivacyLayer Bug Bounty Program
+
+**Version:** 1.0  
+**Launch Date:** March 2026  
+**Status:** Active
+
+---
+
+## Program Overview
+
+PrivacyLayer welcomes security researchers to help identify vulnerabilities in our protocol. This bug bounty program rewards responsible disclosure of security issues that could impact user funds or privacy.
+
+---
+
+## Rewards
+
+### Reward Tiers
+
+| Severity | Description | Reward (USD) |
+|----------|-------------|--------------|
+| **Critical** | Direct loss of user funds, privacy breach | $10,000 - $50,000 |
+| **High** | Vulnerabilities leading to potential fund loss | $5,000 - $10,000 |
+| **Medium** | Security issues with limited impact | $1,000 - $5,000 |
+| **Low** | Minor vulnerabilities | $100 - $1,000 |
+| **Informational** | Best practice suggestions | $50 - $100 |
+
+### Critical Vulnerabilities
+
+Examples of Critical vulnerabilities:
+- Theft of user funds from the privacy pool
+- Ability to withdraw funds without valid ZK proof
+- Merkle tree manipulation leading to double-spending
+- Privacy leakage allowing deposit-withdrawal linking
+
+### High Vulnerabilities
+
+Examples of High vulnerabilities:
+- Bypass of rate limits or pause mechanisms
+- Governance key compromise vectors
+- Front-running attacks with guaranteed profit
+- Circuit implementation flaws
+
+### Medium Vulnerabilities
+
+Examples of Medium vulnerabilities:
+- Denial of service vectors
+- Gas manipulation attacks
+- Information disclosure
+- Access control bypass (non-critical functions)
+
+---
+
+## Scope
+
+### In Scope
+
+| Component | Type | Details |
+|-----------|------|---------|
+| Pool Contract | Soroban | `contracts/privacy_pool/` |
+| Verifier Contract | Soroban | `contracts/verifier/` |
+| Noir Circuits | ZK | `circuits/` |
+| TypeScript SDK | Library | `sdk/` |
+| CLI Tool | Application | `cli/` |
+
+### Out of Scope
+
+- Third-party dependencies (report to upstream)
+- Social engineering attacks
+- DDOS attacks
+- Spam attacks
+- Issues requiring physical access
+- UI/UX issues without security impact
+
+### Specific Exclusions
+
+- Vulnerabilities in test files
+- Issues in example code
+- Theoretical vulnerabilities without proof of concept
+- Issues already reported
+
+---
+
+## Submission Process
+
+### 1. Report Format
+
+Submit reports via email to: **security@privacylayer.io**
+
+Include:
+```
+Subject: [BUG BOUNTY] <Brief Description>
+
+Body:
+- Summary
+- Affected Component(s)
+- Steps to Reproduce
+- Proof of Concept
+- Impact Assessment
+- Suggested Fix (optional)
+```
+
+### 2. Response Timeline
+
+| Stage | SLA |
+|-------|-----|
+| Initial Response | 48 hours |
+| Triage & Severity | 5 business days |
+| Validation | 10 business days |
+| Fix Development | Variable |
+| Reward Payment | 7 days after fix |
+
+### 3. Communication
+
+- All communication via encrypted email
+- PGP Key: [Download from website]
+- Do not discuss vulnerabilities publicly
+
+---
+
+## Rules
+
+### Do's ✅
+
+- Test only on testnet initially
+- Report vulnerabilities promptly
+- Provide clear reproduction steps
+- Allow time for fix before disclosure
+- Respond to follow-up questions
+
+### Don'ts ❌
+
+- Access or modify others' data
+- Perform testing on mainnet without permission
+- Publicly disclose before fix is deployed
+- Demand payment or threaten disclosure
+- Test vulnerabilities beyond what's needed
+
+---
+
+## Safe Harbor
+
+PrivacyLayer commits to:
+
+1. **No Legal Action**: We will not pursue legal action against researchers who follow these rules.
+
+2. **Anonymity**: Your identity will be kept confidential unless you request otherwise.
+
+3. **Fair Evaluation**: All reports will be evaluated fairly and rewards determined transparently.
+
+4. **Public Recognition**: With your permission, we will publicly thank you for your contribution.
+
+---
+
+## Platform Integration
+
+### Immunefi (Recommended)
+
+For higher rewards and better protection, submit via Immunefi:
+
+- URL: https://immunefi.com/bounty/privacylayer
+- Immunefi handles mediation
+- Faster payout process
+- Additional rewards from Immunefi
+
+### Direct Submission
+
+For sensitive findings or if you prefer:
+
+- Email: security@privacylayer.io
+- PGP encrypted preferred
+- Manual review process
+
+---
+
+## Responsible Disclosure
+
+### Timeline
+
+| Day | Action |
+|-----|--------|
+| 0 | Vulnerability reported |
+| 2 | Initial response sent |
+| 10 | Severity determined |
+| 30 | Fix developed and tested |
+| 45 | Fix deployed to testnet |
+| 60 | Fix deployed to mainnet |
+| 90 | Public disclosure (with permission) |
+
+### Disclosure Policy
+
+- Do not disclose publicly until fix is deployed
+- Coordinate disclosure timing with PrivacyLayer team
+- Credit will be given in security advisories
+
+---
+
+## Eligibility
+
+### Who Can Participate
+
+- Individual security researchers
+- Security firms
+- PrivacyLayer community members
+
+### Who Cannot Participate
+
+- PrivacyLayer employees and contractors
+- Immediate family members of employees
+- Residents of sanctioned countries
+
+---
+
+## Payment
+
+### Methods
+
+| Method | Fees | Processing Time |
+|--------|------|-----------------|
+| USDC (Stellar) | None | Immediate |
+| USDC (Ethereum) | Gas only | 24 hours |
+| BTC | Network fee | 24 hours |
+| Bank Transfer (USD) | Wire fee | 5-7 days |
+
+### Tax Implications
+
+- Rewards over $600 may require tax documentation
+- PrivacyLayer will provide necessary forms
+- Researchers responsible for local tax compliance
+
+---
+
+## Hall of Fame
+
+### 2026
+
+| Date | Researcher | Severity | Vulnerability |
+|------|------------|----------|---------------|
+| - | - | - | - |
+
+*Be the first to appear here!*
+
+---
+
+## Contact
+
+- **Security Email**: security@privacylayer.io
+- **PGP Key**: [Link]
+- **Immunefi**: https://immunefi.com/bounty/privacylayer
+- **Discord**: #security channel
+
+---
+
+## Version History
+
+| Version | Date | Changes |
+|---------|------|---------|
+| 1.0 | March 2026 | Initial launch |
+
+---
+
+*By participating in this program, you agree to these terms and conditions.*
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