General risk disclosure

Smart Contract Risk

Despite efforts to mitigate risks through testing, audits, and bug bounties, the possibility of vulnerabilities in smart contract code always remains a concern.

Smart contract risk pertains to weaknesses within the code of a blockchain protocol, potentially resulting in unforeseen or adverse consequences like security breaches or financial losses. Engaging smart contract auditors with each protocol version release can substantially mitigate these risks. These auditors meticulously inspect the contract code to preemptively detect any potential issues before they can be exploited. This proactive strategy ensures the security and proper functionality of smart contracts, thereby protecting both the protocol and its users from potential vulnerabilities.

Black Swan

A crypto black swan event refers to an unforeseeable occurrence within the cryptocurrency market that leads to a significant decrease in prices.

How can Hakifi be affected by Black Swan:

The Claim Pool is the resource for funding payouts, financed by the Hakifi pool. In the case of Black Swan events, given that the number of Bear positions is larger than the Bull positions, the Claim Pool can be depleted quickly. This can result in insufficient Claim Amount that users are entitled to.

To safeguard the user’s core benefits, the Hakifi Pool - the finance of the Claim Pool, is designated to be always 20% greater than the Margin Pool.

Exchange Risk

Pricing of Hakifi is derived from the leading volume exchange and system operations involve various elements regarding other exchanges. This means that if the exchange fails, Hakifi faces the challenges of that failure.

To minimize this risk, Hakifi is diversifying third-party options. Our strategy might integrate several trusted liquidity sources, eliminating the risks of single-point failure.

Phishing

Phishing and scams are prevalent occurrences, regardless of their association with blockchains.

In blockchain-related phishing scams, users may be deceived into disclosing private keys, seed phrases, or other sensitive information, or into authorizing malicious transactions.

When engaging with unfamiliar websites and validating transactions in your wallet, it's crucial to verify both the contract being interacted with and the operation being authorized.