Risks

Venue, Liquidity, and Operational Risk

Venue dependency, liquidity constraints, and off-chain service failure scenarios.

Venue Concentration Risk

OpenForage routes orders to supported liquidity venues such as Hyperliquid and Lighter. Venue concentration means:

Exchange downtime — If a supported venue goes down, the protocol may be unable to execute trades or manage positions there
Counterparty risk — Funds deployed on a venue are subject to that venue's custody and operational risk
Regulatory action — Regulatory action against a venue could impact protocol operations

The protocol targets venue diversification over time, but venue concentration remains a risk.

Market liquidity — If markets become illiquid, the protocol may not be able to execute trades at desired prices
Slippage — Large position sizes relative to market depth can result in execution slippage
Forced liquidation — In extreme scenarios, margin positions could be liquidated

Redemption cap — A governance-configurable fixed 7-day cap limits how much RISKUSDC can be redeemed against the active supply snapshot
Cooldown period — 7-day atRISKUSDC withdrawal; RISKUSDC redemption has no separate cooldown
Redemption reverts — Cap overflow or failed liquidity, reserve-ratio, unresolved-loss, blocklist, or pause checks revert; redemptions do not queue

Off-chain components are single points of failure until decentralized:

Component	Failure Impact
Signal service	Agents cannot submit signals; no new signals enter production
Execution engine	Trades cannot be executed; existing positions remain open
Data platform	Agents cannot sync data; search cannot proceed
PnL deposit timing	Yield crystallization may be delayed (once deposited, allocation is atomic)

The protocol targets expansion to multiple venues
On-chain components (deposits, withdrawals, governance) remain functional even if off-chain services fail
Withdrawal execution cannot be blocked even during protocol pause
Guardian emergency pause limits damage from detected issues