Risks

A non-exhaustive list of high-level protocol-related risks.

  • ETH Price Risk: A prolonged downturn in ETH price may result in insufficient treasury value to repay debt at expiry.

  • Smart Contract Vulnerabilities: As with any DeFi protocol, contract exploits or bugs pose technical risks.

  • Liquidity Constraints: While protocol-owned liquidity reduces the risk of sudden liquidity shortfalls, extreme market conditions could still strain the system.

  • Governance Attacks: Malicious governance proposals may lead to detrimental parameter changes if on-chain voting is compromised.

  • Market Adoption: The protocol relies on sustained demand for both convertible notes and STRAT. A lack of market participation limits revenue and leveraged upside.