One job
Your API docs should help a teammate run the project and make the first successful request in 10 minutes.
Good docs are not long. They are accurate, runnable, and copied from the real API, not from memory.
What to document
For a hackathon repo, keep docs in README.md unless the API is large. A teammate should not need Postman screenshots to understand your API.
Cover these parts: project purpose, local setup, base URL, version, auth if any, endpoints, query params, request bodies, response examples, error format, and known limits.