🛑Managing Risk

Understanding the Risks

Option Risk: Liquidity providers earn yield by selling optionality. This means giving up upside. The vault can never be wiped. However, the value of it when traders make successful trades can result in it being less than market value since upside is given away.

Temporary Insufficient Amounts For Withdrawal: When traders execute a trade against tVaults, they trade directly against the vault. so if the liquidity is being traded and it exceeds the amount that the user wants to withdraw, the user can only withdraw a limited amount of their liquidity.

Technical Risk: As with any DeFi protocol, there are inherent smart contract risks, such as vulnerabilities or exploits. To mitigate these risks, the platform undergoes regular third party audits by accredited auditors, ensuring the security and integrity of the smart contracts