# Risk Disclosure

# Smart Contract Risks

While our strategies are designed to deliver stable, risk-adjusted returns, they carry inherent smart contract risks. The protocol, which underpins our strategies, has undergone rigorous development and employs robust security practices. However, vulnerabilities in smart contracts could still expose funds to unforeseen risks, such as exploits or bugs within the protocol's code. Additionally, interactions between multiple protocols increase the overall attack surface, making security audits essential but not infallible.

# Hedging and Market Risks

Delta-neutral strategies are carefully managed to minimize exposure to price fluctuations. However, risks may arise, particularly during periods of extreme market volatility. Rapid price shifts in assets can impact hedging accuracy, potentially leading to unanticipated losses. Temporary exposure to price movements may also occur if rebalancing is delayed due to network congestion or system outages. Furthermore, external factors such as significant changes in funding rates or borrowing costs can influence yield generation, affecting overall profitability.

# Operational and Technical Risks

Operational risks stem from potential delays or inaccuracies in data fetching, which may affect hedging operations and strategy performance. We mitigate these risks by sourcing data from multiple providers and using a time-weighted average price. However, technical failures in RPC calls, network congestion, or system outages could impact execution. Delta calculation inaccuracies or settlement risks during extreme market conditions may also affect performance.

# Liquidity Risks

Liquidity constraints may arise during high-stress market conditions, affecting fund withdrawals and trade execution. If underlying protocols experience reduced liquidity, transaction delays or increased slippage could occur, impacting strategy outcomes. Additionally, exposure to protocol's overall financial health and risk of bad debt propagation through its lending pool system should be considered.

# Security and Control

Your funds remain under your control at all times. The team has trading privileges only and does not have custody of user assets. All assets are securely held in delegated vaults, with no ability for the team to withdraw user funds. While we uphold the highest security standards, users should remain aware of the inherent risks in DeFi strategies.

# Important Note

While we employ sophisticated risk management techniques and maintain high security standards, no investment strategy is entirely risk-free. Users should carefully consider their risk tolerance and investment objectives before participating. This risk disclosure is not exhaustive and may be updated as market conditions and protocol features evolve.

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