Risks
Digital assets and smart-contract transactions involve substantial risk, including the loss of some or all value committed to a transaction.
| Risk | Description |
|---|---|
| Smart contract | Defects in contract code can cause loss. Contract logic is upgradeable under the roles described on the Architecture page, and upgrades execute only while the system is paused. |
| Counterparty | A counterparty may fail to perform on the terms of a transaction. |
| Market | Price moves can produce an unfavorable outcome within the defined structure. |
| Oracle | An incorrect or unavailable price feed can affect settlement. Settlement prices are not independently validated; the administrative settlement backstop is described on the Architecture page. |
| Network | Blockchain network disruption can delay or prevent a transaction. |
| Settlement | Settlement can fail, or resolve against the holder, under the executed terms. |
A defined payoff limits certain outcomes within a single term. It does not guarantee profit, does not protect against all loss, and protection applicable to one term does not extend beyond it. Past outcomes do not predict future ones.
Disclaimers. The information on this site and in this documentation is not investment, financial, trading, legal or tax advice. Use of the Protocol involves significant risk, including the potential for total loss of value committed. Only use capital you can afford to lose. See the Terms of Service.