Risks

Trading risk

• Leverage multiplies losses as well as gains. You can lose all the margin in a position.
• At 10x, a move of about 2% against you triggers liquidation, and liquidation costs a 5% fee on the closed value.
• Long-tail tokens move fast and their pools can be thin. Spreads are wider and leverage is lower for that reason.
• Orders fill at the next price, not the price you saw. The limit on your order bounds the difference.

Haircut risk

A pool can only pay out what it holds. If traders in one market win more than the pool and its insurance fund can cover, winners are paid pro rata and the unpaid share is shown. Your deposited margin is not used to pay other traders, and other markets are not affected.

Price source risk

A market is only as good as the pool that prices it. Smoothing, the price band, the staircase and the depth check make manipulation expensive. They do not make it impossible, especially for a pool near the minimum depth. If a price stops updating, the market stops opening new positions.

Smart contract and operational risk

• The contract has not had a third-party audit and may contain bugs.
• The contract is upgradeable by the owner key during the hackathon period.
• The keeper and the API run on free hosting. If the keeper stops, orders do not fill until someone runs one. Funds stay in the contract and anyone can call the same methods.
• This is a testnet deployment. It can be reset.

No advice

Nothing in these docs is financial, legal or tax advice. Perpetuals may be restricted where you live.