"...every vessel in the town was filled with water, every warrior was armed... before the roar of Smaug's terrible approach grew loud, and the lake rippled red as fire beneath the awful beating of his wings." – The Hobbit

Smaug cannot have more than 12 damage on him.

When the players quest successfully, any number of progress tokens that would be placed on this quest may instead be discarded to remove the same amount of damage from Lake-Town.