Plain English
A bug bounty is a public reward program where security researchers earn payouts for responsibly disclosing vulnerabilities they find. Major DeFi protocols offer six- and seven-figure bounties for critical findings; Immunefi is the dominant marketplace. A healthy bounty program is a strong sign of protocol maturity.
How it actually works
The protocol publishes scope (which contracts are eligible), severity tiers, and payouts. A whitehat finds a bug, reports it privately, the protocol fixes it, and the researcher gets paid based on severity and impact. Top payouts have hit $10M+ for critical findings on protocols like Wormhole and Aave.
What it means for you
For HNW DD, the bug-bounty page tells you (1) how seriously a protocol takes security, (2) the maximum-payout level (which implies how confident they are), and (3) whether ongoing whitehat attention exists. A $50K max bounty on a $500M TVL protocol is a red flag. A $2M max bounty with active monthly payouts is reassuring.
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