can’t they just drain it?
You mean the bug bounty, right? Hackathons are usually just events where people build new products in a short period of time.
Oops yes bug bounty
If the bug bounty is on a testnet, there's no incentive whatsoever for the hacker to exploit the bug versus report it. If it's on mainnet, then reporting the bug allows the hacker to get a legitimate source of income (versus having to erase their tracks, try to get a fake KYC to off-ramp, and potentially get their assets frozen).
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