Risks
Vault Participant Risks
Lock-ups, loss exposure, exchange-rate downside, and redemption-cap risk for atRISKUSDC holders.
Trading Loss Risk
When protocol trading operations incur losses, the atRISKUSDC exchange rate decreases. Your shares become worth less RISKUSDC. There is no automatic loss buffer.
- You can lose some or all of your deposited capital
- The governance treasury may vote to voluntarily absorb losses, but this is not guaranteed
- Loss exposure is proportional to your share of the vault
Lock-up Risk
If you are in a locked tier (T1, T2, or T3), you cannot request withdrawal until your lock-up expires.
| Tier | Lock-up | Risk |
|---|---|---|
| T0 | None | Can exit anytime (subject to 7-day cooldown) |
| T1 | 3 months | Cannot exit for 3 months |
| T2 | 6 months | Cannot exit for 6 months |
| T3 | 12 months | Cannot exit for 12 months |
During your lock-up, if the exchange rate drops significantly, you cannot exit to limit losses.
Auto-Renewal Risk
Auto-renewal is enabled by default. If you forget to disable it before your lock-up expires, your lock-up resets automatically for another full term. Monitor your auto-renewal setting regularly.
Exchange-Rate Lock on Withdrawal
When you request withdrawal, the RISKUSDC amount is locked at the current exchange rate. This protects you from further losses during the cooldown period, but it also means you cannot benefit from exchange-rate increases during the cooldown.
Cooldown and Redemption-Cap Risk
- atRISKUSDC withdrawal: 7-day cooldown
- RISKUSDC redemption: Single immediate
RISKUSDCVault.redeem(uint256)transaction when checks pass - Weekly redemption cap: Governance-configurable fixed 7-day cap on RISKUSDC redemptions, measured against the active supply snapshot
If many depositors exit simultaneously, the weekly redemption cap or vault checks may block some redemptions until conditions change. A cap overflow reverts; it does not create a redemption queue. RISKUSDC redemption may also revert or be blocked by vault liquidity, reserve-ratio checks, unresolved loss or loss-pending conditions, blocklist status, or pause conditions.
No High Water Mark
There is no High Water Mark mechanism. You pay for yield on gross performance, not net-of-previous-losses performance. If the exchange rate drops and then recovers, you participate in the full recovery.