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Risk Management

Comprehensive overview of platform risks and mitigation strategies.

Key Risks​

1. Custody Risk​

Risk: Physical assets could be stolen, damaged, or lost.

Mitigation:

  • Professional custody partners
  • Full insurance coverage
  • Regular audits
  • Secure vault facilities

2. Smart Contract Risk​

Risk: Code vulnerabilities or exploits.

Mitigation:

  • Multiple security audits
  • Bug bounty program
  • Gradual rollout
  • Emergency pause mechanism

3. Oracle Risk​

Risk: Price manipulation or oracle failure.

Mitigation:

  • Multi-source pricing
  • Challenge mechanism
  • Time-weighted averages
  • Circuit breakers

4. Market Risk​

Risk: Asset price volatility and crashes.

Mitigation:

  • Conservative LTV ratios
  • Insurance fund
  • Liquidation mechanisms
  • Diversified collateral

5. Regulatory Risk​

Risk: Regulatory changes affecting operations.

Mitigation:

  • Legal compliance
  • Jurisdiction diversification
  • Proactive engagement with regulators

Insurance Fund​

$2.5M insurance fund (5% of TVL) covers:

  • Smart contract exploits
  • Oracle failures
  • Bad debt from liquidations

Emergency Procedures​

Platform includes emergency pause mechanisms and governance controls.

User Best Practices​

  • Never invest more than you can afford to lose
  • Use risk management tools
  • Diversify your positions
  • Monitor health factors

See also: Smart Contract Security