Risk Considerations
Stablis Protocol operates as a non-custodial system, meaning tokens sent to the protocol are managed by smart contracts. Your funds are subject solely to the rules set forth in the smart contract code, which has undergone rigorous auditing by Omniscia.
Potential Risk Scenarios:
Borrower Liquidation:
If you are a borrower (Chest owner) and your collateral is liquidated, your Chest will be closed and the collateral will be used to compensate Stability Pool depositors. You will retain the borrowed USDs.
Stability Pool Depositor Risks:
As a Stability Pool depositor, your deposited USDs may be used to repay debt from liquidated borrowers. While you will likely receive more collateral in return, if the collateral's value decreases, you could incur a loss.
USDs Peg Deviations:
USDs is designed to be soft pegged to the USD, it can deviate slightly in both directions under certain market conditions.
Smart Contract Risks:
Although our smart contracts are thoroughly audited, there is always a risk of bugs or vulnerabilities that could be exploited.
Market Volatility:
Although we have safety measures in place, sudden market movements can impact the value of collateral and the stability of the protocol.
Governance Risks:
Decisions made through governance voting could impact the protocol's operations, and there is a risk that some decisions may not align with the interests of all users.
By understanding these potential risks, users can make more informed decisions and better manage their exposure within the Stablis Protocol.
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