Add privacy policy

PRIVACY_POLICY.md

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+# Privacy Policy
+
+## Overview
+WakaTime for Figma is a browser extension that tracks your design time and activity in Figma. This privacy policy explains what information we collect, how we use it, and your rights regarding this data.
+
+## Data Collection
+
+### Authentication Data
+- **Figma Authentication**: The extension uses Figma cookies to authenticate with Figma's official API. These cookies are only used for API authentication and are never stored or transmitted elsewhere.
+- **WakaTime Authentication**: Your WakaTime API key and API URL are stored locally in your browser's secure storage. These credentials are only used to send activity data to WakaTime's servers.
+
+### Activity Data
+We collect the following information about your Figma usage:
+- Project and layer names from your Figma files
+- Time spent editing and viewing files
+- Timestamps of your design activity
+- Basic system information (operating system and browser name)
+
+### What we don't collect
+- File contents or design assets
+- Personal information beyond what's listed above
+- Figma account credentials
+- Screenshots or visual content
+- Communication or messages
+
+## Data Usage
+- All collected data is sent directly to WakaTime's servers (or your specified alternative server for High Seas users)
+- Data is used solely for generating time tracking statistics and activity reports
+- No data is sold or shared with third parties
+
+## Data Storage
+- Authentication credentials are stored locally in your browser
+- Activity data is stored on WakaTime's servers (or your specified alternative server)
+- No additional local storage is used beyond browser extension settings
+
+## Third-Party Services
+This extension integrates with:
+1. Figma's API - For accessing file and activity information
+2. WakaTime's API - For storing and processing activity data
+
+## User Rights
+You have the right to:
+- Access your tracked data through your WakaTime dashboard
+- Stop tracking at any time by disabling or uninstalling the extension
+- Request deletion of your data through WakaTime's platform
+
+## Updates to Privacy Policy
+We may update this privacy policy as needed. Significant changes will be communicated through the extension's update notes.
+
+## Contact
+For privacy concerns or questions, please open an issue on our [GitHub repository](https://github.com/SkyfallWasTaken/figma-wakatime/issues).
+
+## Open Source
+This extension is open source. You can review its code and functionality on [GitHub](https://github.com/SkyfallWasTaken/figma-wakatime).